Tax season for owner-managers: what to gather, check and file

If you own an Ontario corporation you have two tax filings to manage, on two different calendars, and the decisions that set the outcome were mostly made before either return was started. Very little can be improved once the year has closed. What is still available at filing time is accuracy, the deductions and credits you can actually support, and not paying interest on money you did not need to owe late.

This is the checklist we run. It carries no dollar figures for the amounts CRA indexes annually, because those are the numbers old articles get wrong.

Gather during the year, not in March

The most expensive habit is reconstructing a year from memory in the spring. Deductions get missed because the receipt is gone, and credits get missed because nobody knew to look.

Keep running records for the personal categories people routinely forget: family medical expenses, including premiums paid to a private health plan; tuition amounts, including those transferred from a child; charitable donations, which can be pooled and carried forward; childcare receipts; moving expenses where the move was for work or school; interest paid on money borrowed to earn business or investment income; and the paperwork for anything bought or sold that could produce a gain.

On the corporate side, the equivalent is keeping the books close to current. A set of books eleven months behind at year end produces a return built on estimates, and estimates are what get reassessed. Current bookkeeping also means the year-end planning conversation happens while there is still time to act on it, which is most of what our bookkeeping, HST and payroll work is for.

The corporate checklist

Most corporate outcomes are locked at year end, so this list is about verifying that what was planned actually happened.

• The salary and dividend mix for the year is decided and the slips are prepared. T4 and T5 slips are due the last day of February for the preceding calendar year. How that decision gets made is covered in how to pay yourself: salary or dividends, and our salary vs dividends calculator gives you a first pass.
• Any bonus accrued at year end was paid within 179 days of the year end, or the deduction moves to the following year.
• Shareholder loan balances are cleared within the required window, or the amount is included in someone's personal income.
• Equipment bought late in the year was available for use before year end. Delivered, installed and capable of doing its job, which is what makes the capital cost allowance claim land this year. The rule is set out in year-end business purchases.
• HST filed for the year reconciles to the revenue and input tax credits in the financial statements. A gap between the two is one of the more reliable ways to attract a review.
• Instalments paid match what was required, and the balance-due date is on the calendar.
• Any subcontractor reporting is done. Construction businesses have a separate T5018 obligation on its own schedule.

The personal checklist

Confirm every slip is in. Use CRA My Account or your software's auto-fill as a cross-check rather than the source of truth. T3 and T5013 slips arrive late and are the most common reason a return has to be amended.

Pull your carryforwards. Unused RRSP room, unclaimed tuition, net capital losses from prior years and donations carried forward all sit on your notice of assessment, and all of them get left on the table. Medical expenses can be claimed for any twelve-month period ending in the year, so the window is worth choosing rather than defaulting to January through December.

List the year's life events. A home bought or sold, a move for work or school, a marriage or separation, a new dependant, a disability certification, income from a second province, or a change in residency all change the return. The sale of a principal residence has to be reported even when no tax is owing, and skipping that reporting carries a penalty.

Check foreign holdings. A T1135 is required where the total cost of your specified foreign property exceeded the reporting threshold at any point in the year. That threshold has sat at $100,000 for a long time and is worth confirming rather than assuming.

RRSP and TFSA room

RRSP room accrues at 18% of the prior year's earned income up to an annual maximum that CRA indexes, reduced by any pension adjustment, plus every dollar of unused room carried forward. Only salary counts as earned income, so an owner who took dividends all year generates none. Your notice of assessment shows the figure, and the carryforward is usually larger than people expect.

Two points of timing matter. A contribution made in the first 60 days of the calendar year can be applied against either the prior year or the current one, which gives you a choice about which year's income to reduce. And you do not have to claim the deduction in the year you contribute. If this year's income is unusually low and next year's will be much higher, contributing now and claiming later is worth more.

TFSA room accrues each year from the year you turn 18 as a Canadian resident, unused room carries forward indefinitely, and a withdrawal restores the same amount of room on January 1 of the following year. Recontributing in the same year you withdrew is the most common way people create an over-contribution penalty for themselves.

Where the money sits matters too. Interest is taxed at your full marginal rate, eligible dividends from Canadian public corporations are grossed up and then reduced by the dividend tax credit, and only a portion of a capital gain is taxable, so interest-bearing holdings generally belong inside the registered accounts. Inside a corporation the same logic applies with an extra layer, because passive investment income is taxed at a high rate initially, part of it is refundable when dividends are paid out, and passive income above a threshold grinds down the small business deduction on active income.

The dates

The line that catches people is the corporate one. A corporation's balance is due before its return is. A CCPC claiming the small business deduction gets three months after year end to pay and six months to file, so the money is owed at a point when the return is often not even started. Interest runs from the balance-due day at CRA's prescribed rate and it is not deductible. The practical answer is an estimate paid on time and a final number filed later.

The personal equivalent is June 15. The filing deadline moves for self-employment income, the payment deadline does not, and interest runs from May 1 regardless. Our CRA deadline checker produces the exact set of dates for your year end.

What to re-check every year

A fixed process beats trying to follow every announcement, because whatever changed this year gets caught by the process rather than by luck. Four categories move almost every year:

Indexed amounts. Federal and Ontario brackets, the basic personal amount, the age amount and most non-refundable credits are indexed to inflation. The rules stay put while the numbers drift.

Contribution and limit figures. RRSP maximums, annual TFSA room, CPP earnings ceilings and contribution rates, and benefit clawback thresholds all reset in January.

Prescribed interest rates. Set quarterly, and they drive instalment interest, arrears interest, the taxable benefit on shareholder and employee loans, and prescribed rate loans used for income splitting.

Credits and measures arriving, expanding and expiring. This is the category people miss, because a credit you did not qualify for last year may apply this year, and a temporary measure you relied on last year may have ended. The list of eligible medical expenses is broader than most people assume and has been extended more than once.

Reporting obligations have been a moving target as well. Trust reporting, beneficial ownership and property-related filings have all been introduced, revised or deferred in recent years. If you have a trust, hold property through one, or own foreign assets, confirm the current requirement each year instead of assuming last year's answer still applies.

Fixing a return after it is filed

Amendments are routine and not a sign that something went wrong. A T1 can be changed through My Account, through your software's ReFILE service, or on a T1-ADJ. Individuals can request a change going back ten calendar years under the taxpayer relief provisions, which is longer than CRA's own window to reassess you.

Corporations get less room. A T2 adjustment request is generally limited to the normal reassessment period, three years from the original notice of assessment for a CCPC, so a corporate error found late is worth acting on quickly. Interest continues to accrue on anything that turns out to be owing, and a voluntary correction is treated differently from one CRA finds first.

Routine years can be handled routinely. The ones that cost money have something new in them: a property sold, a business started or wound up, a first employee hired, income from more than one province, an inheritance, a separation. That is where advice is cheap next to the mistake, and the mistake usually surfaces two years later with interest attached. We review the previous few years as part of taking on a new file, and an unclaimed carryforward or a missed credit turns up more often than people expect. If you are not sure your current arrangement still fits, our accountant self-check covers the questions worth asking, and our corporate and personal tax work treats both returns as one job rather than two.

All of our corporate and personal tax work

General information only, current at August 2026. Tax rules change and GST/HST status is fact-specific. Confirm your own position before relying on anything here.