As a business owner, the last quarter of the year is your opportunity to take control, not just of operations, but of your tax position.
Smart planning before December 31 can help you reduce taxable income, smooth cash flow, and strengthen your books for the year ahead.
Here are three simple but powerful tax moves you can make now to finish strong and set up 2026 for success.
1. Accelerate Your Expenses
If your business uses the accrual method, expenses are deductible in the year they’re incurred — even if you haven’t paid them yet. That means a few strategic prepayments before year-end can reduce your 2025 tax bill.
Consider accelerating these types of expenses:
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Office rent or utilities (if January’s bill can be paid early)
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Professional services — bookkeeping, legal, or consulting fees
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Marketing and advertising (commit before December 31)
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Supplies or inventory you’ll need early next year
💡 Example:
If you know you’ll spend $3,000 on marketing in January, paying that bill in December can bring the deduction forward — lowering your taxable income for 2025.
For sole proprietors or partnerships: this can be especially useful if you expect a higher income this year than next.
For corporations: ensure the expense aligns with legitimate business activity before year-end and is properly supported by invoices or receipts.
2. Declare Bonuses Before Year-End
Bonuses are an effective tool for income management and employee retention, but they’re also a powerful tax planning strategy.
If you declare a bonus by December 31, your corporation can deduct it this year, even if you pay it out in the first 180 days of 2026 (by June 28).
This allows you to:
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Reduce your corporate income in the current tax year
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Reward yourself or key employees strategically
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Smooth out personal income by timing bonus payments
💡 Example:
Your company has $100,000 in profit for 2025. Declaring a $15,000 bonus to yourself reduces corporate taxable income immediately. You can then pay that bonus to yourself early next year — when your personal tax situation might be more favorable.
Pro Tip: If you operate a professional corporation, this strategy also helps balance retained earnings and personal cash flow.
Just make sure the declared bonus is recorded in your minutes and booked as a payable on the year-end balance sheet.
3. Prepay Insurance & Other Deductible Costs
Prepaying certain expenses — like insurance, interest, or memberships — can be an easy way to lock in deductions before year-end.
You can prepay for:
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Business insurance premiums (even if coverage extends into next year)
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Professional association dues or software subscriptions
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Loan or lease interest payments (if allowed by contract)
This can be especially valuable for cash-based businesses, where you can only deduct expenses once they’re paid.
💡 Example:
If your annual business insurance renews in February, paying the premium in December lets you claim the deduction now — lowering your current-year income.
Why These Moves Matter
The tax return you file in spring is simply a reflection of what you do now.
Waiting until March to “find deductions” is too late — CRA rules are calendar-based, and once December 31 passes, most opportunities disappear with it.
A few well-timed actions now can mean:
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Thousands in tax savings
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A cleaner balance sheet
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Less stress (and better sleep) in April
Ready to Plan Your Year-End Strategy?
Don’t wait until tax season — make your year-end work for you.
👉 Book a Business Year-End Review and we’ll help you:
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Identify immediate deductions
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Plan cash flow for early 2026
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Maximize your corporate or self-employed return
You’ll head into the new year with clarity and confidence.
💬 Referral Reminder
Do you know someone who could benefit from this kind of clarity?
Refer them to INDep Accounting and get 5% off your next return once they become a client.
Because good advice — and good results — are worth sharing.
