The last few weeks before your fiscal year-end are your best chance to reduce tax and avoid surprises. Once the year closes, most planning opportunities are gone. Work through this checklist with your accountant.
1. Clean up your books
- Reconcile every bank account and credit card to the statement.
- Follow up on unpaid invoices, and identify any that are truly uncollectible.
- Record bills you owe but haven’t paid yet.
- Separate any personal expenses paid through the business.
2. Time your purchases
If you were planning to buy equipment, a vehicle or computers, buying and putting them into use before year-end can let you claim capital cost allowance this year rather than next.
3. Plan owner pay and bonuses
Decide your salary-dividend mix before year-end. A corporation can deduct a bonus declared at year-end only if it’s actually paid within 180 days after the year-end, so plan the cash flow.
4. Check shareholder loans
If you’ve taken money out of your corporation that wasn’t salary or dividends, review the shareholder loan account. Amounts not repaid in time can be added to your personal income.
5. Reconcile GST/HST
Make sure the GST/HST you collected and the input tax credits you claimed match your books, and that every return for the year has been filed.
6. Get ready for slips
T4 and T5 slips and summaries are due by the last day of February. Confirm employee details and dividend amounts now.
7. Personal planning
- RRSP contributions (deadline 60 days after December 31)
- TFSA and FHSA room
- Personal tax instalments due December 15
8. Book a planning meeting
Thirty minutes with your accountant before year-end is usually worth more than hours after it.
Year-end coming up? See our plans and pricing or contact Wealth Street Services. We’re in Brampton and serve clients across Canada.
Sources
This article is general information, not tax or financial advice. Rules and amounts change, so confirm details with the Canada Revenue Agency or speak with our team about your situation.
