Year-End Tax Planning Tips for Business Owners in Oakville

Introduction: Don’t Let December 31 Catch You Off Guard

As the year winds down, it’s easy for business owners to get caught up in the holiday rush or day-to-day operations. But smart entrepreneurs in Oakville know that year-end tax planning can make a big difference in how much tax you’ll owe—or save—come filing season.

At Henderson Roller Partnership, we work closely with small and mid-sized businesses across Ontario to help them proactively prepare before the calendar turns over. With the right strategy in place before December 31, you can minimize tax liability, optimize cash flow, and set yourself up for a stronger start in the new year.

This guide outlines key year-end tax moves for business owners, along with a handy checklist you can start using right away.

1. Review and Maximize Business Deductions

Now is the time to look at your income and expenses to ensure you're not leaving money on the table.

✅ Consider:

• Purchasing supplies, equipment, or tools before December 31

• Paying professional memberships or insurance premiums in advance

• Making charitable donations for eligible tax credits

• Scheduling maintenance or upgrades (especially if you're cash-based)

💡 Tip: If you're on an accrual basis, expenses are deducted when incurred—even if paid later. On a cash basis, they must be paid before year-end to count.

2. Purchase Capital Assets Strategically

Thinking about buying equipment, furniture, or a new work vehicle?

If you purchase and put the asset into use before year-end, you may be able to claim Capital Cost Allowance (CCA) and begin depreciating it immediately.

Common eligible capital assets:

• Computers and office tech

• Manufacturing or construction equipment

• Business vehicles

Work with your accountant to ensure the purchase fits your budget and tax plan.

3. Review Owner Compensation (Salary vs. Dividends)

If you're incorporated, how you pay yourself can significantly impact your personal and corporate taxes.

Your CPA can help you:

• Reassess your salary vs. dividend split

• Calculate CPP contributions

• Project the personal impact of bonuses or dividend payments

• Explore opportunities to income split with a spouse or family member

Decisions made before year-end can lower both corporate and personal tax burdens.

4. Contribute to RRSPs and Tax-Advantaged Accounts

Though the RRSP deadline is typically in late February, reviewing your income now helps determine how much to contribute for the current tax year.

Also consider:

• TFSA contributions (for after-tax savings)

• RESP or RDSP contributions (for family planning)

If your business is incorporated, talk to your CPA about Individual Pension Plans (IPPs) or corporate-owned investment accounts.

5. Write Off Bad Debts

If you have outstanding invoices that are unlikely to be paid, you may be able to write them off as bad debt—but only if you take action by year-end.

Steps to do this properly:

• Show efforts were made to collect the debt

• Document why you believe it’s uncollectible

• Remove it from your books as revenue

This allows you to reduce your taxable income for the current year.

6. Pay Out Employee Bonuses

Planning to reward your team with bonuses? Consider issuing them before December 31 so they can be deducted this tax year (even if paid in early January, in some cases).

This also applies to:

• Contractor payments

• Sales incentives

• Vacation payouts

Work with your bookkeeper or payroll provider to ensure proper withholding and reporting.

7. Check Your Shareholder Loan Balance

If you've withdrawn funds from your corporation as a shareholder loan, you may be required to repay it within the next fiscal year to avoid it being taxed as income.

Before year-end, consider:

• Repaying part or all of the balance

• Declaring a bonus or dividend to offset it

• Reclassifying the loan with CPA guidance

Don’t let this slip under the radar—it’s a common trigger for CRA reviews.

8. Consider Inventory Write-Downs

Retailers, wholesalers, and manufacturers should take a year-end inventory count and review for:

• Obsolete items

• Damaged goods

• Shrinkage

You may be eligible to write down inventory to its fair market value, reducing taxable income.

9. Make Year-End Tax Instalments (If Required)

If you’ve been asked by the CRA to make quarterly instalments and haven’t kept up, now’s the time to catch up before interest accrues.

Your CPA can calculate your instalment requirement based on:

• Last year’s taxes owing

• Current year’s projected income

It’s better to pay early than to be penalized in the spring.

10. Plan for HST and Payroll Reporting Deadlines

While year-end tax planning is important, don’t forget about other compliance areas.

Before year-end, review your:

• HST filing frequency and due dates

• Payroll tax remittances (especially if issuing bonuses)

• T4, T5, and ROE deadlines (coming in February)

Staying ahead helps prevent last-minute errors and penalties in Q1.

✅ Year-End Tax Planning Checklist

✔️ Review income and expenses

✔️ Accelerate deductions where possible

✔️ Purchase necessary capital assets

✔️ Confirm HST and payroll accounts are up to date

✔️ Revisit compensation strategy (salary/dividends)

✔️ Assess RRSP and TFSA contributions

✔️ Identify and write off bad debts

✔️ Pay bonuses or declare dividends

✔️ Reconcile shareholder loans

✔️ Schedule a year-end meeting with your CPA

How Henderson Roller Can Help

Located in Oakville, Henderson Roller Partnership is your year-round tax partner. We support entrepreneurs across Ontario with:

• ✅ Strategic year-end tax planning

• ✅ Owner compensation optimization

• ✅ Corporate and personal tax filing

• ✅ Bookkeeping and payroll support

• ✅ Audit readiness and CRA compliance

Let us help you close the year with clarity—and start the next one stronger.

Book Your Year-End Tax Planning Session Today

📍 Visit Henderson Roller Partnership in Oakville📞 Call to speak with a CPA today💻 Or schedule your consultation online

Henderson Roller – Proactive Tax Solutions for Ontario Business Owners.