Corporate year-end planning tips

As your corporation’s fiscal year-end approaches, now is the perfect time to take a closer look at your financial position and identify opportunities to reduce your corporate tax burden. Strategic year-end tax planning ensures your business remains compliant, profitable, and positioned for success in the upcoming year.

Here are some key corporate year-end tax planning strategies Canadian business owners should consider.

1. Review and Maximize Business Deductions

Ensure that all legitimate business expenses are captured before year-end. This will ensure that all the expense deductions are accounted for, helping in maximizing deductions and minimizing year-end tax burden.

💡 Tip: Accurate bookkeeping records can ensure that every legitimate business deduction is captured and reported on the tax return of the corporation. At Jewan Bhullar Chartered Professional Accountant Inc. we can help you manage accurate financial record keeping so that you can focus on your core business.

2. Use the Small Business Deduction Wisely

The Small Business Deduction allows Canadian-controlled private corporations (“CCPCs”) to pay a reduced tax rate on active business income up to $500,000.

However, this limit is shared among associated companies and can be reduced if your corporation earns more than $50,000 in passive investment income. Review your corporate structure to preserve access to the Small Business Deduction.

💡 Tip: We encourage you to reach out to your tax advisor or contact us for a free consultation for review of your business and current corporate structure to effectively plan the maximization of your SBD limit.

Manitoba has a 0% tax rate on up to the first $500,000 of active business earned by a CCPC.

3. Review Shareholder Loan Account

If you are a shareholder of a corporation and have borrowed (withdrawn) money from your corporation’s bank account for your personal use in the year or have contributed your personal money to the corporation’s bank account, prior to the corporation’s year-end it is extremely important to review the shareholder loan account in the books of the corporation to make sure to that you are complaint with all the tax laws in regard to shareholder transactions with the corporation.

💡 Tip: You as a shareholder of the corporation, might be eligible to withdraw money from your corporation tax-free. Please contact us to review and appropriately plan for the corporation’s shareholder loan accounts prior to the year-end.

4. Strategic Planning of Owner-Manager Renumeration

Owner-managers should review whether a salary, dividend, or combination in addition to the year-end bonus payment is most tax-efficient. We can help you review the situation of your corporation on a case-by-case basis and advise on the most effective way to renumerate an owner-manager of the corporation.

💡 Tip: Proper renumeration planning can play a big role in managing the Small Business Deduction of the corporation effectively.

Fact: Jewan Bhullar has helped CCPCs reduce more than $50,000 in year-end tax expense by implementing appropriate Owner-Manager Renumeration Strategies.

5. Optimize Capital Cost Allowance (CCA)

Corporations should ensure that the corporate tax return appropriately reports all the assets owned by the corporation to maximize the tax depreciation and minimize the year-end tax burden of the corporation.

💡 Tip: If you plan to purchase new equipment, technology, or vehicles, doing so before year-end may let you claim tax depreciation for the current year and reduce your year-end tax liability.

6. Hold Year-End Meetings to Review Corporate Structure and Update Minute Books

This is the perfect time to sit down with your tax advisor and review your corporate structure to ensure that your current corporate structure meets the short-term goals and objectives of your business and at the same time has your business ready for long-term success.

Document all corporate decisions such as bonuses, dividends, and management fees.Keep your minute book up to date to maintain compliance and prepare for potential CRA reviews.

💡 Tip: Careful planning, regular reviews and updates (if necessary) to your corporate structure can help ensure proper implementation of tax efficient strategies in the long-term in addition to protecting your business legally.

7. Review Corporate Tax Instalments

Ensure your corporate tax instalments match your actual income levels.

💡 Tip: Overpaying tax instalments ties up cash unnecessarily, while underpaying can lead to penalties.

Final Thoughts

Corporate year-end tax planning isn’t just about minimizing taxes — it’s about optimizing your company’s financial strategy, improving cash flow, and setting up for long-term success.

Every corporation’s situation is unique, and the right strategy depends on your goals, structure, and profitability.

💼 Need Help with Corporate Year-End Tax Planning?

At Jewan Bhullar Chartered Professional Accountant Inc., we help Canadian business owners identify tax-saving opportunities and make confident year-end decisions.

📞 204-509-0029 | ✉️ jewan@risecpallp.ca | 🌐 jewanbhullar.com