Start Year-End Accounting Early

Begin your corporate year-end accounting at least 60 days before your fiscal year-end. Reviewing your trial balance, outstanding receivables, and accrued liabilities early gives you time to make tax-saving adjustments before the books close. Rushing year-end accounting after the deadline passes eliminates options that could have reduced your T2 tax bill.

Reconcile Every Balance Sheet Account

Your year-end accounting must include full reconciliation of bank accounts, credit cards, loans, and intercompany balances before preparing financial statements. Unreconciled accounts cause errors on Schedule 100 and Schedule 125 of your T2 return. CRA flags mismatches between your year-end financial statements and filed schedules during desk reviews.

Accrue All Outstanding Expenses

Record every expense your corporation owes at year-end — unpaid invoices, accrued wages, and professional fees — even if the payment has not been issued yet. Proper year-end accounting accruals reduce taxable income on your T2 filing and ensure your NTR financial statements reflect the true cost of operations for the fiscal period.

Maximize CCA Before Year-End

Purchase eligible capital assets before your fiscal year-end to trigger capital cost allowance on Schedule 8 of your T2 return. The Accelerated Investment Incentive allows a full first-year deduction on most new acquisitions. Delaying the purchase by even one day past year-end defers this corporate year-end deduction by an entire fiscal period.

Declare Bonuses Within the Fiscal Year

If your year-end accounting shows higher-than-expected corporate income, declare a management bonus before the fiscal year-end. The bonus is deductible on your T2 return in the current year as long as it is paid within 179 days. This year-end strategy shifts income from the corporation to a lower personal tax bracket.

Reconcile Payroll With PD7A

Your corporate year-end accounting must verify that all source deductions remitted to CRA match your payroll records and T4 summaries. Discrepancies between PD7A statements and your T4 filing trigger CRA trust account reviews and penalties of 10% on repeat late remittances. We reconcile payroll as part of every year-end engagement.

Review GST/HST Before Filing T2

Your year-end accounting should include a full HST reconciliation to confirm that GST/HST collected and input tax credits reported match the general ledger. CRA cross-references your T2 revenue against HST returns. Mismatches between corporate year-end revenue and HST filings are a top audit trigger that a simple reconciliation prevents.

Prepare Clean NTR Financial Statements

Your Notice to Reader financial statements form the foundation of your T2 corporate tax return. Year-end accounting that produces organized, GIFI-coded NTR financials ensures every income and expense line maps correctly to CRA schedules. Sloppy financials lead to filing errors, CRA queries, and delays that cost time and interest on reassessments.

Review Shareholder Transactions at Year-End

Corporate year-end accounting must capture every shareholder loan advance, repayment, personal expense, and dividend declaration accurately on Schedule 50. Under ITA subsection 15(2), unrepaid shareholder loans become taxable personal income. Catching these items during year-end review — not after CRA does — saves your shareholders from unexpected personal tax assessments.

File Your T2 Return on Time

Your T2 corporate tax return is due six months after your fiscal year-end, but the tax balance owing is due within two or three months depending on your corporation type. Late T2 filing after year-end triggers a 5% penalty plus 1% monthly on unpaid tax. Completing year-end accounting promptly ensures both deadlines are met.