You’ve still got time to make smart, tax-efficient decisions before December 31. But only if you act now. Most owners wait too long and miss valuable ways to reduce taxes, optimize cash, and close the year clean.
Do it right, and you can:
• Reduce your overall corporate and personal tax burden
• Avoid surprise balances owing in April
• Unlock cash flow opportunities (e.g., dividends, bonuses, debt repayments)
• Improve funder/investor confidence by showing fiscal responsibility
• Ensure cleaner, faster filing with fewer corrections
• Avoid rushed decisions and bad advice at tax time
• Make proactive strategic moves instead of defensive clean-up
Heads up: You’ll need clean, up-to-date books to know your numbers and make these moves. Get in touch — Enkel can help with expert catch-up bookkeeping and monthly bookkeeping.
TL;DR
• Year-end tax planning isn’t about scrambling in March — it’s about preparing now.
• Surplus cash, payroll, and tax liability decisions made in Q4 affect what you owe (and how protected you are) next year.
• Enkel helps clients clean up their books, understand their numbers, and make these decisions with clarity — not panic.
15 Must-Track Metrics & KPIs for Nonprofit Success
Smart Year-End Tax Moves to Make Before December 31
1. Run a Preliminary Tax Projection
Your CPA won’t finalize your taxes until spring. But that doesn’t mean you need to wait. A simple tax projection in Q4 gives you a working estimate of how much you’ll owe, and allows time to make smart adjustments.
What this helps you catch:
• Unexpected tax bills
• Large income swings
• Gaps in payroll remittances or GST filings
Ask your controller or CPA to run a preliminary estimate using your current net income, salary vs. dividends breakdown, and any expected year-end adjustments.
2. Decide How to Use Surplus Cash Strategically
Sitting on excess cash? You’ve got options. And each one comes with different tax implications.
• Pay a dividend (if your retained earnings allow it)
• Invest in business assets (with potential CCA/tax deferral)
• Repay business debt
• Set aside for bonuses, raises, or team retention
• Prepay deductible expenses (like insurance or software)
The right move depends on your structure, goals, and projections. But doing nothing is rarely the best call.
3. Consider a Final Payroll Run (Or T4 Bonuses)
If you’re planning to issue bonuses or top up T4 salaries, December is your deadline. These payments must hit accounts by December 31 to count as deductible in the 2024 tax year.
Heads-up:
• CRA requires source deductions at the time of payment.
• Large bonuses can trigger CPP or EI max-outs — check thresholds.
4. Review Owner Compensation Strategy
Many owner-operators use a blend of salary and dividends — but the ratio should shift based on income, profitability, and long-term plans.
Year-end is your moment to assess:
• Are you maximizing RRSP contribution room?
• Do dividends make sense based on retained earnings and passive income rules?
• Are there family members on payroll with unused brackets?
Work with your tax advisor to fine-tune the approach. A small adjustment now can save thousands later.
5. Optimize for RRSP, TFSA, or IPP Contributions
If you’re drawing a T4 salary, review your RRSP contribution room. If you’re a higher earner looking for longer-term planning, talk to your advisor about an Individual Pension Plan (IPP).
While contributions technically happen in Q1, the salary that determines your limit must be finalized by year-end.
Note: Speak to your tax accountant or financial planner to make the best strategy for you.
6. Revisit Capital Asset Purchases
Planning to invest in equipment, software, or hardware?
Under CRA rules, you can claim half of the CCA deduction (capital cost allowance) in the year of acquisition — even if you purchase in late December.
If you’re flush with cash and need to offset income, this can be a smart move.
7. Reconcile GST, PST, and Payroll Liabilities
Before year-end, make sure your compliance calendar is up to date.
• Have you filed all required GST/HST returns?
• Are your payroll remittances current?
• Are any balances owing accruing interest?
Fixing issues now — before year-end — prevents penalties, fees, or unpleasant surprises during filing season.
8. Review Shareholder Loans or Related Party Transactions
If you’ve borrowed from the business or vice versa, you’ll want to clean this up before year-end. CRA rules on shareholder loans are strict, and repayments may be required by your fiscal year-end to avoid tax consequences.
Talk to your accountant if:
• You’ve taken funds out that weren’t issued as salary or dividends
• You’ve repaid a loan and want to document it cleanly
• You’ve got intercompany transactions or related party invoices that aren’t settled
9. Book Time With Your CPA Before They’re Swamped
The best tax decisions are made in November and December — not in the rush of March. Most CPAs are underwater by tax season. Getting in early ensures you’re not just compliant, but strategic.
What to ask them:
• Should I pay myself more this year or defer income?
• Are there capital purchases I should make now?
• Can we reduce this year’s tax bill with available tools?
• Are there upcoming CRA changes that might affect me?
Remember: Clean, Current Books Are Non-Negotiable
You can’t make smart tax decisions if you don’t have reliable numbers. If your books are behind or inconsistent, start there.
Need help? Enkel provides expert catch-up bookkeeping and monthly bookkeeping so you can move into tax season with confidence.
Let Enkel Help You Close the Year Strong
You don’t need to handle this alone. Whether you’re behind on your books or simply want to prep smarter for tax season, Enkel can help.
We work with business owners across Canada to clean up financials, clarify obligations, and support confident decision-making.
Let’s make tax season feel like a win — not a fire drill.
