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Year-end has a way of sneaking up on everyone. The final weeks of the year are often packed with project deadlines, budgeting for the new year, and holiday chaos. Yet this is also the most important time to take a clear look at your tax picture. A few proactive decisions now can lower your tax bill later and help you enter 2026 feeling organized and confident rather than rushed and reactive.
Some strategies are familiar annual checkpoints. Others reflect recent changes that could affect both business owners and families this year. Think of this as a helpful reminder list, not a dense textbook. The goal is to keep things simple, timely, and impactful.
For business owners: a quick check of your structure, spending, and strategy
Looking at capital investments with fresh eyes
Government measures currently allow businesses to deduct a greater portion of eligible equipment and capital assets right away¹. If you have been debating the timing of a purchase that supports your growth, acting before year end may offer a real benefit to your bottom line.
Many business owners in Ontario may also benefit from the province’s focus on boosting domestic manufacturing activity. Ontario offers a refundable 10 percent Ontario Made Manufacturing Investment Tax Credit for eligible corporations that acquire qualifying manufacturing or processing equipment and buildings¹⁴. If you were planning to make these purchases early next year, it may be worth considering an accelerated timeline. Making the purchase before the end of 2025 allows you to apply for the credit when filing your 2025 corporate tax return and recover 10 percent of the acquisition cost sooner.
Preparing early for a future sale
If you are thinking about selling your company in the next few years, the increase in the Lifetime Capital Gains Exemption to $1.25 million makes this worth a closer look². The earlier planning begins, the easier it is to tidy up passive or surplus assets and ensure the shares of your company qualify. Even simple cleanup can make a meaningful difference.
Paying yourself in a way that supports your goals
Business owners have flexibility when it comes to compensation. Salary builds RRSP room and can support personal deductions. Dividends can be helpful when you are trying to draw down certain corporate tax pools. Life changes, cash flow needs, and TOSI rules all play a role in deciding what mix makes the most sense each year.
Making smart use of losses
Not every year is a growth year, and that is okay. Corporate losses can help reduce taxes in other years when handled properly. In some cases, losses in one company within your group can be used to offset income in another³. Planning for this now avoids scrambling later.
Avoiding unnecessary interest charges
It is worth double checking corporate tax payment deadlines. The CRA’s interest rate is 7% for Q4 2025⁴. That is not a number anyone wants to pay on overdue tax.
Personal planning: small decisions that can add up
Contribution and payment deadlines most people forget
A few important tax-saving actions must happen before December 31. These include charitable donations and FHSA contributions for the year. Making RRSP contributions can wait until March 2, 2026, but checking your available room now avoids surprises later⁵⁶⁷.
Buying a home someday
Many first-time buyers use the Home Buyers’ Plan, which now allows withdrawals of up to $60,000 from your RRSP⁸. Recent changes provide an extra buffer before repayments need to begin if you made your first withdrawal between 2022 and the end of 2025⁹.
The FHSA is also becoming a popular saving strategy. Even opening the account early, before you are ready to contribute, can be beneficial because contribution room only starts once the account is open⁵.
Building savings for your future or your children’s future
The TFSA limit for 2025 is $7,000¹⁰. It continues to be one of the most flexible ways to invest without worrying about tax later.
RESPs help reduce the future cost of education while earning the Canada Education Savings Grant of up to $500 per year¹¹. If you missed a year or two, you could often catch up gradually, which keeps those grant dollars within reach.
The impact of generosity
Many people assume charitable giving is just a feel-good moment, but it can also meaningfully cut taxes in high-income years. The first $200 of donations receives a 15% federal credit, and the remaining amount receives 29% or 33% for those in the top bracket⁷. Combined with provincial credits, the benefit is even stronger.
If you plan to donate anyway, doing it before December 31 boosts the impact in this year’s return.
Trusts and family planning
Families using trusts should confirm how income will be distributed before year end. The type of beneficiary receiving the income matters, especially if the TOSI rules apply¹².
New reporting rules also mean many trusts that never filed before now have annual filing obligations. The government intends to defer bare trust reporting until 2026, but confirmation from CRA is still in progress¹³. It is worth checking your structure now to avoid a missed filing later.
Why planning early matters
A year can change a lot. Businesses shift direction. Families expand. Individuals start new roles or prepare for retirement. That is why year-end planning should feel less like a checklist and more like a moment to step back and ask:
- What changed this year
- What is coming next
- What decisions today support the future I want
Have a question for one of our advisors? A simple conversation can help connect these dots and turn planning into peace of mind. Connect with us!
Footnotes
- Government of Canada. Accelerated Investment Incentive.
https://www.canada.ca/en/department-finance/news.html - Department of Finance Canada. Capital Gains and LCGE Update.
https://www.canada.ca/en/department-finance/news/2024/06/capital-gains-inclusion-rate.html - CRA. Corporation losses: carry back and carry forward rules.
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-12700-capital-gains/capital-losses-deductions.html - CRA. Prescribed interest rates Q4 2025.
https://www.canada.ca/en/revenue-agency/services/tax/prescribed-interest-rates.html - CRA. First Home Savings Account rules and limits.
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account.html - CRA. RRSP limits and deduction rules.
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans.html - CRA. Charitable donation tax credit rules.
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-34900-donations-gifts.html - CRA. Home Buyers’ Plan withdrawal limit.
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan.html - Government of Canada. HBP repayment relief measures.
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan/repay-funds-withdrawn-rrsp-s-under-home-buyers-plan.html - CRA. TFSA contribution room and rules.
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/tax-free-savings-account.html - CRA. Canada Education Savings Grant details.
https://www.canada.ca/en/services/benefits/education/education-savings.html - CRA. Tax on Split Income rules.
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-40424-federal-tax-on-split-income.html - Government of Canada. Trust reporting update.
https://www.canada.ca/en/revenue-agency/services/tax/trust-administrators/t3-return/filing-trust-return/what-changed.html - Government of Ontario. Ontario Made Manufacturing Investment Tax Credit.
https://www.ontario.ca/page/ontario-made-manufacturing-investment-tax-credit
