Tax rules, thresholds and administrative procedures can change. Confirm current official requirements and obtain advice for material transactions or unusual facts.
Planning must happen before the year closes
A tax return prepared months after year-end can report what happened but cannot retroactively complete every transaction. Bonuses, purchases, write-offs and legal steps should be considered before the fiscal year-end.
Owner compensation
Estimate corporate income and compare salary, bonus and dividends using equal cash assumptions. Accrued bonuses generally need to be paid within the applicable period to remain deductible. Reconcile amounts already withdrawn by the shareholder.
Capital purchases
Buying equipment solely for a deduction can waste cash. Confirm business need, delivery and availability for use, financing and the current CCA incentives. The deduction may be spread over time and passenger-vehicle limits may apply.
Receivables, bad debts and inventory
Review overdue customer balances and evidence of collection efforts. A doubtful account is not automatically a deductible bad debt. Count and value inventory, identify obsolete items and preserve calculations.
Shareholder and related-party accounts
Reconcile shareholder loans, amounts owing to owners, intercompany accounts and personal expenses. Old debit balances require immediate attention. Confirm dividends with resolutions and account for payroll remittances.
Tax cash flow
Update corporate tax and instalment estimates, GST/HST, payroll and provincial obligations. Separate amounts owing to tax authorities from operating cash. Prepare a year-end document list so missing bank, loan and legal records are obtained promptly.
This article provides general Canadian tax information and is not a substitute for tax, legal, financial or investment advice based on complete circumstances.