By OptiVal Editorial Desk
October is the month when year-end tax planning in Canada stops being theoretical. For owner-managers with a December 31 year-end, the moves you make in the next ten weeks decide how much of 2026’s profit you keep. Wait until January and most of your options are gone: bonus accruals, capital loss harvesting, and equipment timing all close with the calendar year. This checklist covers the decisions worth making now, in plain terms, with the 2026 numbers.
Year-end tax planning starts with your 2026 income picture
Before you touch any strategy, get a real estimate of where 2026 will land. Pull your books current through September, project the fourth quarter conservatively, and put a number on corporate profit and your personal income. Almost every year-end move (how much salary to take, whether a bonus accrual makes sense, whether capital losses are worth harvesting) depends on that estimate. If your books are not current through Q3, fixing that is your first job. Guessing in December does not work.
Settle the salary versus dividend question before December
The biggest December decision for most owner-managers is still how to pay themselves. Our breakdown of the 2026 numbers is in Dividend vs Salary in Canada: The 2026 Numbers, but the timing point matters here: salary creates RRSP room and counts toward CPP, while dividends are simpler and skip payroll. If you want RRSP room for 2027, the salary has to be paid (or accrued and paid within the deadline) in 2026. There is no way to create RRSP room retroactively. Run the comparison on your actual 2026 income, because marginal rates, the Ontario small business rate cut, and your other income all shift the answer.
Accrue staff bonuses now, but respect the 179-day rule
Bonuses are deductible in 2026 even if you pay them in early 2027, provided two conditions are met: the amount is determined and documented before year-end, and it is actually paid within 179 days after your year-end. For a December 31 year-end, that means payment by late June 2027. Miss the 179-day deadline and the deduction moves to 2027 instead. Document the bonus in a 2026-dated board resolution or written agreement, and remit source deductions when it is paid. This is also the moment to confirm your T4 and T5 slips will be ready: they are due the last day of February 2027, and late filing starts at $100 in penalties.
Time equipment purchases around the new expensing proposal
Here is the biggest live development in 2026 year-end planning. On September 15, 2026, the federal government proposed the Productivity Mega Deduction: permanent 100% first-year expensing for a broad range of depreciable property acquired on or after September 15, 2026 (in the year it becomes available for use), plus immediate expensing for eligible Canadian development expenses. Draft legislation has been released, but it has not been enacted. The honest framing is “if enacted as proposed”; buildings, goodwill, and related-party shuffles do not qualify. What this means for October: if you were already planning to buy equipment, machinery, computers, or software before year-end, acquiring it after September 15 and putting it into use in 2026 may qualify for the full write-off if the proposal passes. Do not buy equipment purely for the deduction. But if the purchase was happening anyway, the timing is worth getting right.
Harvest capital losses while the 50% inclusion rate holds
One piece of certainty in 2026: the capital gains inclusion rate is 50%, the same as it has been since 2000. The proposed increase to two-thirds was cancelled in March 2025 and never took effect. If you realized capital gains earlier in 2026 (an investment sale, a property disposition), selling losing positions before year-end can offset them, provided the trades settle in 2026. Watch the superficial loss rule: if you, your spouse, or your corporation repurchases the same security within 30 days before or after the sale and still holds it 30 days after, the loss is denied. Net capital losses you cannot use in 2026 are not wasted; they carry back three years or forward indefinitely. For owners eyeing a future business sale, the lifetime capital gains exemption is $1,275,000 for 2026 (indexed), but the qualification tests take at least 24 months, so start that conversation this year.
Use the registered-account room you still have
The 2026 TFSA limit is $7,000, with cumulative room of $109,000 for someone eligible since 2009. Contributions are not deductible, but growth and withdrawals are tax-free, which makes unused TFSA room one of the most underused tools for owners. RRSP contributions for the 2026 tax year can be made through the first 60 days of 2027 (March 1, 2027), so you have more time there, but the contribution room itself depends on 2026 earned income, which circles back to the salary decision above. First-time home buyers can still use the FHSA: up to $8,000 per year in deductible contributions, capped at $40,000 lifetime. Check your actual room on CRA My Account rather than trusting memory; TFSA over-contributions are taxed at 1% per month.
Clear shareholder loans and intercompany balances
Money borrowed from your corporation during the year must be repaid within one year after that taxation year ends, or it is deemed income (limited exceptions apply). Line up repayments now rather than discovering the problem at tax time. Clean intercompany balances too, so year-end accounting does not become a March reconstruction project.
Put the filing calendar where you can see it
Half of year-end planning is the calendar. For a December 31 year-end: Q4 GST/HST return due November 2, 2026 (October 31 is a Saturday, so the weekend rule applies). T4, T4A, and T5 slips due the last day of February 2027. RRSP deadline March 1, 2027. Ontario employer health tax return March 15, 2027. Personal T1 due April 30, 2027. T2 balance due February 28, 2027, with the return due June 30, 2027. Every one carries interest or penalties if missed.
What is still just a proposal, and how to plan around it
The Productivity Mega Deduction is draft legislation and the text could change before enactment. Plan purchases under the existing CCA rules and treat the Mega Deduction as upside. This has been an unusually active year for Canadian tax proposals, and several announced measures were modified or dropped before becoming law. Build on enacted law, flag the proposals separately, and revisit them in January.
Get it done while there is still time to act
October gives you options; December gives you deadlines. Our Q4 Year-End Sprint was built for exactly this moment: fixed-fee year-end packages (Essentials $549, Full Sprint $949, CAD plus HST) with a 2026 tax position review, a year-end action plan, and a filing calendar through mid-2027. The booking window runs October 1 to December 1, 2026. Or book a free consultation and we will tell you which year-end moves matter for your situation. We are led by qualified professionals with more than 75 years of combined experience, PwC-trained, with CFO-level experience at world-leading multinationals.
