Holding deposits

[Suzie_Homemaker]

According to my tax lady: If you receive a deposit and spend it right away then you claim it for the year you got it. If you put the deposit in a bank account and don't touch it until the client leaves then you claim it in the year then client leaves. I always add a note to my year end receipt stating the deposit will be added once its used. I have a separate bank account just for deposits.

I make sure I comply with CRA rules. Tax lady is only human and can make mistake. Since it CRA who can audit, penalize, fine, it their guide I stick to and if person give advice conflict with CRA rule, I call CRA and double check.

CRA say clearly it declared year it earned, that what I stick to. Not worth risk if non CRA professional say different since CRA audit on their rules not tax lady belief.