Building a Tax Strategy After Filing Season

The weeks immediately after filing are the best time to start planning because your tax return gives you a clear snapshot of the previous year.

You can quickly identify trends in revenue, expenses, deductions, and any unexpected CRA balances owing.

Waiting until next filing season often means missed tax saving opportunities and rushed decisions.

Starting now allows you to adjust invoicing, expense tracking, payroll strategy, and installment planning early.

A strong tax strategy is not only about reducing taxes.

It is about building a healthier and more profitable business.

The main benefits include:

• better cash flow management

• reduced CRA interest and penalties

• improved quarterly planning

• smarter hiring and expansion decisions

• stronger bookkeeping discipline

For incorporated businesses in Ontario, the small business deduction can be a major advantage.

Eligible CCPCs currently pay a combined rate of approximately 12.2 percent on the first $500,000 of active business income.

Start by reviewing your 2025 tax return and Notice of Assessment line by line.

Pay close attention to:

• business income trends

• expense categories

• missed deductions

• capital asset purchases

• HST balances

• installment notices from CRA

This review often highlights missed opportunities such as:

• home office expenses

• vehicle use

• phone and internet costs

• meals and entertainment

• capital cost allowance on equipment

Many businesses in London, Ontario discover they were either under claiming legitimate deductions or mixing personal and business expenses.

Once you understand last year’s numbers, set tax aligned financial goals for the current year.

Examples include:

• target annual revenue

• desired owner compensation

• tax savings goals

• planned business purchases

• retained earnings target

For example, if your goal is to retain profits inside your corporation for future expansion, your salary and dividend strategy should support that.

Bookkeeping is the engine behind tax planning.

Without accurate books, tax strategy becomes guesswork.

Use cloud accounting software such as QuickBooks Online to categorize expenses monthly.

Track items such as:

• software subscriptions

• office supplies

• mileage

• subcontractor payments

• meals with clients

• advertising costs

• office rent

For vehicle use, always keep a mileage log.

CRA mileage rates can change annually, so verify the current prescribed rate before year end calculations.

Instead of quoting a fixed number in the blog, it is better SEO wise and legally safer to say:

use the current CRA prescribed automobile allowance rate for 2026

One of the biggest mistakes small businesses make is waiting until next April.

If your balance owing exceeded $3,000 in either of the previous years, CRA may require installment payments.

For sole proprietors and self employed individuals, installment due dates are generally:

• March 15

• June 15

• September 15

• December 15

Corporations may have monthly or quarterly installments depending on eligibility.

Missing these payments leads to unnecessary interest and penalties.

There are several major opportunities available in 2026.

Small Business Deduction  

Eligible CCPCs pay:

• 9 percent federal tax

• 3.2 percent Ontario tax

This results in a combined rate of approximately 12.2 percent

Capital Cost Allowance  

If you purchase equipment, computers, furniture, or business vehicles, proper CCA planning can improve cash flow.

RRSP Contributions  

For incorporated business owners taking salary, RRSP contributions remain a powerful tax planning tool.

Home Office and Mixed Use Expenses  

A portion of rent, utilities, internet, and phone expenses may be deductible.

Capital Gains Planning Update for 2026  

This section needed an important correction.

Instead of saying the inclusion rate has definitely changed, it is safer to state:

capital gains rules have seen multiple proposed updates, and business owners should review the latest CRA guidance before selling investments or business assets in 2026

Common post filing mistakes include:

• ignoring installment notices

• poor bookkeeping

• mixing personal and business expenses

• late HST filings

• no salary versus dividend planning

• missing CCA claims

If your revenue is growing, you are hiring staff, or you have multiple income streams, this is the right time to work with a CPA in London, Ontario

A local Forest City CPA understands:

• CRA compliance

• Ontario tax rules

• HST obligations

• corporate tax optimization

• shareholder compensation planning

The most tax efficient businesses do not treat tax season as a one time event.

They build systems.

Monthly bookkeeping reviews, quarterly tax check ins, and annual planning sessions help keep your business optimized.

For small businesses in London, Ontario, Canada, a proactive tax strategy can mean thousands saved each year.