Year-end tax checklist for incorporated business owners

Most of the tax you can save on a corporate return is decided before your year-end date — not when you file six months later. By the time the return is prepared, the levers are locked. This checklist covers the moves worth making while you still can.

1. Decide how you'll pay yourself

Your salary-versus-dividend mix is the biggest year-end decision. Salary is deductible to the company and builds RRSP room and CPP; dividends are simpler and avoid CPP but build no RRSP room. The right blend depends on your income needs, the year's brackets and whether profit is above or below the small business limit. Model it with our salary vs dividends calculator before you commit.

2. Deal with shareholder loans

If you've drawn money from the company that isn't salary or a dividend, it's sitting in a shareholder loan. Left unaddressed past the required window, the CRA can tax the entire balance in your personal hands. Review it before year-end and either repay it, or convert it to salary or a dividend deliberately — on your terms, not theirs.

3. Time bonuses

Accruing a bonus before year-end lets the corporation deduct it in the current year, even if it's paid up to 180 days later. That can shift income into a more favourable year and create RRSP room for you. It requires payroll withholding when paid, so it needs to be planned, not improvised.

4. Time capital purchases

If you're planning to buy equipment, a vehicle or technology, when you buy affects your deduction. Assets available for use before year-end can start claiming depreciation (capital cost allowance) this year. If a purchase is coming anyway and a deduction helps this year, timing it before the date can make sense — but don't buy things purely for a write-off.

5. Review GST/HST, payroll and books

Make sure your GST/HST and payroll accounts are reconciled and filed, and that your bookkeeping is clean and up to date. A reconciled set of books is faster (and cheaper) to file from, and it's the only way the moves above can be calculated accurately. This is where ongoing corporate tax support pays off.

6. Look ahead, not just back

Year-end is also the moment to forecast next year's tax, right-size your instalments, and decide whether retained earnings should be invested, distributed or held. That forward view is exactly what a fractional CFO brings to a growing business.

The bottom line

The corporate return you file is mostly a record of decisions you already made. Spend an hour on this checklist before your year-end date and you keep the decisions — and the tax savings — in your own hands.