What To Do Before December 31st (Assuming your year-end is in December)

As the year winds down, most business owners shift their focus to closing projects, finalizing financials, and taking a breath before January hits. But there’s one more task that deserves a spot at the top of that list: year-end tax planning.

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Taking the time to review your corporate tax strategy before December 31st can help minimize your tax bill, strengthen your cash flow, and ensure you’re entering the new year on a solid financial footing. At Stoutenberg & Company, we guide business owners through every step, making tax planning feel less overwhelming and far more strategic.

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Here’s what you should be looking at as the year comes to a close.

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1. Review Your Corporate Structure and Tax Rates

Your corporation’s structure—CCPC, professional corporation, or otherwise—plays a major role in how income is taxed. Year-end is the perfect time to review whether your current setup still supports your goals.

A few questions to consider:

• Are you still eligible for the Small Business Deduction (SBD)?

• Has your business grown to the point where another structure would be more tax-efficient?

• Do upcoming ownership changes affect tax planning?

Understanding how your structure impacts your tax rate allows you to take proactive steps before year-end.

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2. Make Strategic Purchases Before Year-End

If your business needs equipment, technology upgrades, or other capital assets, purchasing them before December 31st may allow you to claim capital cost allowance (CCA) sooner.

A few tips:

• Even if the asset is purchased late in the year, you may still be able to claim the half-year rule.

• Consider whether accelerated CCA rules apply.

• Don’t purchase just for the sake of a deduction. Focus on items that support long-term growth.

This strategy can reduce your taxes today while strengthening operations for tomorrow.

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3. Pay Out Bonuses Wisely

Bonuses can be an excellent year-end tool both for motivating your team and managing taxable income.

Corporations can deduct bonuses accrued in the year as long as they’re paid within 180 days after year-end. This allows you to:

• Reduce taxable income now

• Delay the cash outlay until the new year

• Structure bonuses to benefit key employees (including owner-managers)

If you’re an owner, bonuses can also help balance your salary-dividend mix.

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4. Revisit Your Salary vs. Dividend Strategy

Choosing the right way to pay yourself has tax implications for both your corporation and your personal finances.

A year-end review helps determine whether:

• You’ve met the minimum salary requirements for RRSP contribution room

• Dividends would be more tax-efficient this year

• A combination of the two would create the optimal balance

Every corporation and every owner is unique. The right mix depends on your income level, cash flow, long-term plans, and existing tax strategy.

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5. Catch Up on Shareholder Loan Accounts

If you’ve borrowed from your corporation during the year, you’ll want to ensure the loan is repaid or otherwise properly structured before your corporate year-end.

Why it matters:

• Shareholder loans not repaid on time may become taxable income.

• Proper documentation is essential.

• Planning ahead can help avoid surprise tax consequences.

This is one area where a quick year-end review can prevent unnecessary tax issues later.

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6. Maximize Deductions and Credits

Corporations may be eligible for several tax credits, depending on the type of business and expenditures made throughout the year. A few to review:

• SR&ED (Scientific Research & Experimental Development)

• Apprenticeship Job Creation Tax Credits

• Training and skill development programs

• Provincial-specific incentives

Don’t assume you don’t qualify. Many businesses qualify for credits they aren’t aware of.

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7. Plan for Corporate Investments

If your corporation holds investments, now is the time to:

• Review unrealized gains or losses

• Consider whether capital gains harvesting makes sense

• Look at passive income planning to avoid erosion of the SBD

Effective planning helps ensure your investment strategy doesn’t unintentionally increase your tax bill.

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8. Review and Update Your Tax Installments

Year-end is a great opportunity to ensure your installments are aligned with your actual corporate income. Overpaying means you’re giving the government an interest-free loan; underpaying can result in surprise installment penalties.

A quick review now can correct course before the new year.

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9. Look Ahead: Tax Planning Isn’t Just for December

While year-end is a valuable time to tidy up your tax position, the truth is:

The most effective tax strategies are built throughout the year, not at the last minute.

Working with a corporate tax advisor helps you:

• Optimize timing of income and deductions

• Structure operations for long-term efficiency

• Plan proactively for business growth and cash flow

• Avoid compliance issues and costly mistakes

At Stoutenberg & Company, we make corporate tax planning an ongoing process, one that feels less overwhelming and more empowering.

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Need Support With Your Year-End Tax Plan? We’re Here to Help!

If year-end tax planning feels daunting, you’re not alone. Many business owners aren’t sure what applies to them, what to prioritize, or how to best prepare for filing season.

Stoutenberg & Company provides hands-on, proactive guidance so you can move into the new year with clarity, confidence, and a solid financial strategy.

Reach out today to start your year-end review.

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