Year-End Tax Planning Strategies for Small Businesses

Don't Wait Until April

The best tax planning happens before your fiscal year ends — not during filing season. By then, your options are limited. Here are proven strategies that Sault Ste. Marie businesses use to reduce their tax burden legally and effectively.

Strategy 1: Accelerate Expenses

If your business is profitable this year, consider making planned purchases before year-end. Equipment, software, supplies, and prepaid expenses can all reduce your current-year taxable income.

Strategy 2: Defer Revenue (When Appropriate)

If you can reasonably defer invoicing until after your fiscal year-end, this pushes revenue into the next tax year. This is especially useful if you expect lower revenue next year or want to stay under the $500,000 small business deduction threshold.

Strategy 3: Maximize Capital Cost Allowance (CCA)

The Accelerated Investment Incentive allows businesses to claim enhanced first-year CCA on eligible property. This can significantly reduce taxable income in the year of purchase.

Strategy 4: Bonus Accruals

Corporations can accrue bonuses to employees (including owner-employees) before year-end to reduce corporate income. The bonus must be paid within 180 days of year-end to be deductible.

Strategy 5: Review Shareholder Loans

Ensure any shareholder loans are repaid within the required timeframe to avoid being included in your personal income.

Start Planning Early

At Fusion Financial, we begin year-end tax planning discussions with clients in Q3 — giving you time to implement strategies before December 31. Get in touch to start planning.