Tax resources & FAQs.

For the 2026 tax year, most individuals must file and pay any balance owing by April 30, 2027. If you or your spouse or common-law partner are self-employed, the filing deadline is June 15, 2027, but any balance owing is still due April 30, 2027. Interest on unpaid balances starts the day after the payment deadline.

Contributions made in the first 60 days of 2027 (expected deadline: March 1, 2027) can be deducted on your 2026 return. Your new room each year is 18% of the previous year’s earned income, up to the annual dollar limit ($33,810 for 2026 and $35,390 for 2027), minus any pension adjustment, plus unused room carried forward. Your exact limit is on your latest Notice of Assessment.

If your tax rate today is higher than you expect it to be in retirement, the RRSP deduction usually wins. If your income is modest, or you may need the money before retirement, the TFSA is often better because withdrawals are tax-free and the room comes back the following year. Many people benefit from using both; our RRSP calculator shows your savings.

Only with the detailed method: the temporary flat-rate method ended after 2022. You must have been required to work from home, worked there more than 50% of the time for at least four consecutive weeks (or used the space exclusively and regularly to meet clients), and have a signed Form T2200 from your employer. You claim a share of utilities, rent and maintenance on Form T777; salaried employees cannot claim mortgage interest, property tax or insurance. Self-employed individuals claim home office costs on Form T2125 under different rules.

The gain on selling a home that was your principal residence for every year you owned it is generally tax-free. A family can designate only one principal residence per year. You must still report every sale on Schedule 3 and Form T2091(IND), even when the gain is fully exempt; late designations can cost up to $8,000 in penalties.

Eligible expenses include prescriptions, dental work, vision care, medical devices, therapy and private health insurance premiums you paid yourself. You can claim the amount above the lesser of 3% of your net income or $2,890 (2026), for any 12-month period ending in the tax year. It is usually best for the lower-income spouse to claim the family’s expenses.

The FHSA lets first-time buyers contribute up to $8,000 a year (lifetime limit $40,000), deduct contributions like an RRSP, and withdraw tax-free for a qualifying first home. You qualify if you are a Canadian resident aged 18 to 71 and did not live in a home owned by you or your current spouse at any time in the current year or the previous four calendar years. Try our FHSA calculator.

Half of a capital gain is added to your income and taxed at your marginal rate; the proposed increase to a two-thirds inclusion rate was cancelled in March 2025. In Ontario, the top effective rate on capital gains is about 26.76%. Capital losses offset gains and can be carried back three years or forward indefinitely.

Don’t ignore it: reply by the date shown, and send only what is requested. Most reviews simply ask for receipts to support a credit or deduction. If the CRA reassesses and you disagree, you generally have 90 days from the notice date (or one year from the filing deadline, if later) to file a Notice of Objection. We can represent you with the CRA.

Several legitimate strategies exist: splitting eligible pension income (up to 50%), spousal RRSPs, prescribed-rate loans (the CRA prescribed rate was 3% throughout 2026), and having the higher earner pay household expenses while the lower earner invests. Attribution rules and the tax on split income (TOSI) apply, so get advice before moving money between spouses.

You must register once your worldwide taxable supplies exceed $30,000 in a single calendar quarter or over four consecutive calendar quarters. Crossing the threshold in one quarter means you must charge HST on the sale that takes you over; under the four-quarter test you stop being a small supplier at the end of the following month. Either way, you have 29 days to register. Voluntary registration lets you claim input tax credits sooner.

Canadian-controlled private corporations (CCPCs) pay a reduced rate on up to $500,000 of active business income, shared among associated corporations. Federally, the limit shrinks once the group earns more than $50,000 of passive investment income and disappears at $150,000; Ontario does not apply that grind. It is also reduced when taxable capital exceeds $10 million and eliminated at $50 million.

An Ontario CCPC pays a combined 11.2% on active business income up to $500,000 for income earned from July 1, 2026 (it was 12.2% before Ontario cut its small business rate to 2.2%), and 26.5% above that. A corporation with a December 31, 2026 year end blends to about 11.7%. Sole proprietors pay personal tax rates on all business profit. Try our corporate tax calculator.

The main benefits are tax deferral (profits you leave in the company are taxed at the low small business rate), limited liability, flexibility in how and when you pay yourself, and access to the lifetime capital gains exemption ($1,275,000 in 2026) when selling qualifying shares. Incorporation adds costs and paperwork, so it usually makes sense once profits exceed your personal spending needs.

Government fees are $300 for an Ontario corporation through the Ontario Business Registry, or $200 for a federal corporation with Corporations Canada (a federal corporation operating in Ontario must also register extra-provincially). A NUANS name search, legal help with articles and a minute book, and accounting setup are additional.

Salary creates RRSP room and CPP pension credits and is deductible to the corporation; dividends avoid CPP contributions and payroll filings. In Ontario, the July 2026 small business rate cut and the January 2027 reduction in the Ontario dividend tax credit both shift the numbers. Most owners do best with a deliberate mix. Compare scenarios with our salary vs. dividend calculator.

Reasonable expenses incurred to earn business income: salaries, rent, utilities, professional fees, software, advertising, insurance, interest, travel, and 50% of most meals and entertainment. Capital assets such as equipment and vehicles are deducted over time through capital cost allowance. Personal expenses paid by the company can be taxable benefits to the shareholder.

Eligible businesses with taxable sales of $400,000 or less (including HST) can remit a fixed percentage of sales instead of tracking input tax credits: 8.8% for services and 4.4% for goods resellers in Ontario, with a 1% credit on the first $30,000. It usually helps service businesses with low taxable expenses. Professionals such as accountants, lawyers and bookkeepers cannot use it. See our Quick Method calculator.

Reconcile all bank, credit card and loan accounts; review receivables and write off bad debts; count inventory; decide on owner salary, bonuses (paid within 180 days of year end) and dividends; time capital purchases; clear shareholder loans; confirm HST, payroll and instalment balances; and prepare for T4, T4A and T5 slips due by March 1, 2027 for 2026.

Keep complete, organized records for at least six years, reconcile your books to your returns, document the business purpose of significant expenses, and keep shareholder transactions clearly recorded. If you receive an audit letter, contact your accountant before responding and authorize them as your representative so communication stays focused and accurate.

Money you take from your corporation that is not salary or dividends creates a shareholder loan. Unless it is repaid within one year after the end of the corporation’s tax year in which it was made (and not as part of a series of loans and repayments), the full amount is added to your income. While outstanding, you may also have a taxable interest benefit at the prescribed rate, 3% throughout 2026.

For 2026, capital cost allowance on a passenger vehicle is capped at a $39,000 cost ($61,000 for zero-emission vehicles), lease deductions at $1,100 a month and interest at $350 a month. If the company provides a vehicle you use personally, a standby charge and operating benefit apply. Alternatively, you can own the car personally and receive a tax-free allowance of 73¢/km for the first 5,000 km and 67¢/km after that.

Canada has no inheritance tax, but at death you are deemed to have sold your capital property at fair market value, and RRSPs and RRIFs are generally fully taxable on your final return unless they pass to a spouse, common-law partner or qualifying dependant. In Ontario, the province also charges Estate Administration Tax (probate) on estates that go through probate.

It reports income from January 1 to the date of death. If death occurs between January 1 and October 31, the final return is due April 30 of the following year; if between November 1 and December 31, it is due six months after the date of death. The executor is responsible for filing it and obtaining a clearance certificate before distributing the estate.

An RRSP or RRIF can roll over tax-free to a surviving spouse or common-law partner, or in some cases to a financially dependent child or grandchild. Otherwise, the full value is taxed on your final return. A TFSA passes tax-free; naming your spouse as successor holder keeps the account intact and does not use their contribution room.

An estate freeze locks in the current value of a business owner’s shares, usually by exchanging common shares for fixed-value preferred shares, so that future growth accrues to new shares held by children or a family trust. It caps the tax owing at death and can multiply access to the lifetime capital gains exemption. It must be carefully structured around the attribution and TOSI rules.

Usually, yes. Direct beneficiary or successor-holder designations on RRSPs, RRIFs, TFSAs and life insurance let those assets pass outside your estate, which can avoid Ontario probate and speed up distribution. Make sure designations match your will and are updated after marriage, separation or a death in the family.

Anyone can call themselves an accountant. A Chartered Professional Accountant (CPA) has completed a graduate-level professional program, passed the Common Final Examination, met practical experience requirements, and is regulated by a provincial body such as CPA Ontario, with mandatory ethics and continuing education. In Ontario, only CPAs who also hold a public accounting licence (LPA) can sign audit and review engagement reports.

Keep all receipts, invoices, bank statements, contracts, payroll records, sales records and the books that support your returns for six years from the end of the last tax year they relate to. If a return was filed late, the six years run from the filing date, and records under objection or appeal must be kept until the matter is resolved.

An audit is an independent examination that gives reasonable (high) assurance that financial statements are free of material misstatement. Most private corporations are not legally required to have one; audits are usually required by lenders, investors, funders, shareholder agreements or not-for-profit legislation. Only a Licensed Public Accountant can perform audits in Ontario.

A compilation (CSRS 4200, formerly Notice to Reader) presents your financial information in statement form with no assurance. A review engagement (CSRE 2400) provides limited assurance through analysis and inquiry. An audit provides reasonable assurance through detailed testing. Cost and effort rise with each level, so choose the one your lender or stakeholders actually require.

The CRA looks at the whole relationship: who controls the work, who owns the tools, whether the worker can profit or lose, and how integrated they are in your business. The contract label alone does not decide it. Misclassifying an employee can lead to assessments for unremitted CPP, EI and income tax, plus penalties and interest.

A T4A reports income other than employment income, such as fees for services paid to individuals who are not employees, pensions, scholarships and certain commissions. Businesses that pay more than $500 in fees for services to an unincorporated contractor generally need to issue one. For 2026, T4A slips are due by March 1, 2027 because February 28 falls on a Sunday.