The CRA requires you to keep receipts and records for every business expense you claim on your T2125. Without documentation, a CRA auditor can disallow the deduction and assess additional tax with interest. Here is a practical, organized guide to exactly what to keep and how long to keep it.
The Six-Year Rule
Keep all business records for six years from the end of the last tax year to which they relate. For expenses claimed on your 2025 T2125 return, keep receipts until at least December 31, 2031. The clock starts from the end of the tax year — not the filing date.
Extended retention is required when: a CRA audit is underway, you filed a return late (the 6 years start from filing date), or business assets subject to CCA still appear on your schedule.
Receipts to Keep by Expense Category
Software and Subscriptions
Keep: email confirmations, PDF invoices, credit card statements showing the charge. Most software subscriptions send a receipt by email — save these to a folder organized by year and month. Annual receipts for subscription renewals are the most common gap (people forget to save them when a card is auto-charged).
Home Office
Keep: lease agreement (showing your address and monthly rent), monthly rent payment confirmations or bank statements, utility bills for the period, home insurance statements, and a floor plan or measurement record of your workspace. A photo of the workspace at the time of the claim is also recommended — it can be years before an audit request arrives, and you may have moved or renovated.
Vehicle Expenses
Keep: mileage logbook (date, destination, business purpose, km for each business trip), odometer readings at January 1 and December 31, fuel receipts, maintenance and repair invoices, insurance certificate showing annual premium, and lease or loan statements if applicable. The logbook is the most critical document — without it, the CRA disallows vehicle expense claims entirely.
Professional Development
Keep: course registration confirmations, payment receipts, and a brief note of the business relevance. For conferences, keep your registration receipt and your agenda or schedule showing it was a business-related event.
Meals and Entertainment
Keep: the actual restaurant receipt (not just the credit card statement), and a note on the receipt or in your records showing: who was present and the business purpose of the meal. The CRA specifically requests this level of documentation for meal claims — a credit card statement alone is insufficient.
Professional Fees (Accountant, Lawyer)
Keep: the invoice from your accountant or lawyer showing the service, date, and amount. These are typically large enough to warrant clear documentation.
Equipment and Technology
Keep: original purchase receipt showing model, serial number if possible, price, and HST paid. For items subject to CCA, you need the original receipt for the full period the asset is on your CCA schedule (potentially 5–8 years).
Digital Receipt Storage
The CRA accepts digital copies. A system that works:
- Photograph receipts immediately after purchase with your phone
- File in a cloud folder: Year / Month / Category (e.g., 2025 / 03-March / Software)
- Back up to Google Drive or Dropbox so they survive a phone loss
- Use your accounting software‘s receipt feature for automatic backup
What Happens Without Receipts in a CRA Audit
In a CRA correspondence audit (the most common type), you are sent a letter asking for documentation for specific expense claims. You have 30 days to respond. Without receipts, the CRA disallows the deduction, recalculates your net income, and assesses additional tax plus interest.
For bank statements without itemized receipts: the CRA may accept a bank statement showing a charge to a recognizable vendor (Amazon, Best Buy) for smaller amounts, but they generally want itemized receipts for anything above $50–$100 and for all meal and entertainment claims.
Frequently Asked Questions
What if I paid cash and didn’t get a receipt?
Cash transactions without receipts are the hardest to defend in an audit. If the amount is small (under $50), a written note in your expense log may be sufficient. For larger amounts, no receipt means no deduction. This is one reason to pay business expenses by card rather than cash whenever possible.
Are credit card statements enough, or do I need itemized receipts?
Credit card statements alone are not sufficient for most expenses — they show a total charge to a vendor but not what was purchased. The CRA wants itemized receipts for meal claims (showing specific items, not just totals) and for any claim where the nature of the expense is not obvious from the vendor name. For software subscriptions from known vendors (Adobe, Spotify, Dropbox), statements are usually adequate.
Can I deduct an expense I paid for personally and forgot to keep the receipt?
If you can reconstruct the expense from bank records, email confirmations, or other secondary evidence, include it and keep that evidence. The CRA’s standard is “reasonable steps to support the claim” — perfect documentation is ideal, but secondary evidence (email of a software renewal, bank statement showing Netflix-equivalent subscription) is better than nothing.