Corporate year end, step by step

Most of what is written about year end describes the paperwork, which is the least interesting part. The part that changes your tax bill happens earlier — in the last weeks before the fiscal year closes, when compensation, purchases and shareholder balances can still be adjusted. Once the year end date passes, the number is largely fixed and the remaining work is reporting it accurately.

So this hub is sequenced by when, not by topic. Section one is what to do while the year is still open. Section two is closing the books. Section three is the statements and the return. If your year end is next month, start at the top; if it passed in March, start at section two.

Stage one: before the year closes

• The year-end tax checklist — the moves worth reviewing in the final weeks, from compensation to asset purchases. Read it about two months before your year end date.
• Bonus or dividend? — the compensation decision that has to be made before the year closes, and the accrual timing behind it. Read it alongside the checklist.
• Salary vs dividends calculator — models the two routes on your numbers, which is the fastest way to make that decision concrete.
• Leave the cash in, or pay it out? — the deferral question behind every year-end compensation decision. Read it if profits have outrun what you need to live on.
• Shareholder loans — the balance that must generally be repaid within one year after the end of the corporate tax year in which it arose, or be added to your personal income. Check yours before the year end, not after.
• Capital cost allowance — why the date an asset is bought and available for use matters to the deduction. Read it before deferring or accelerating a purchase.
• Tax on split income — the rules that decide whether dividends to family members are taxed at their rate or the top one. Read it before declaring any.

Stage two: closing the books

• The bookkeeping errors that stall a year end — the handful of coding and reconciliation problems that turn a review into a rebuild. Read it any time; act on it monthly.
• How often to do the books — what actually breaks when the books are only touched once a year, and what the once-a-year approach really costs. Read it if year end is always a scramble.
• Bring the books current — for the case where several periods are behind and the year end cannot start until they are done.
• Bookkeeping and year-end accounting — how the monthly work and the annual work fit together when one firm does both.
• How long to keep the records — what to file away once the year is closed, and for how long. Read it before any cleanout.

Stage three: statements, the return and the deadlines

• Financial statement preparation — what gets produced from the closed books and who reads it. Read it if a lender or landlord has asked for statements.
• Compilation engagements (CSRS 4200) — the standard package most lenders expect from a small corporation, and who is permitted to issue it.
• The T2 deadline explained — the six-month filing window and the earlier payment date that sits inside it. Read it as soon as the year end date passes.
• T2 deadline calculator — returns your filing and payment dates from your year end. Thirty seconds, once a year.
• Late-filing penalties — what a missed T2 actually costs, and why it escalates for repeat lateness. Read it if a deadline has already gone.
• The corporate tax hub — the wider annotated set of T2, instalment and planning guides once the year end itself is behind you.

The pattern worth noticing across all three stages: everything expensive is a timing problem rather than a knowledge problem. Owners rarely lose money because they did not know a rule — they lose it because they learned the rule in April about a decision that had to be made in November.

Where the year end is for a small owner-managed corporation, financial statements for small Aldergrove corporations sets out what is genuinely required and what is optional.