Your Top Year End Money Questions
Hello All,
It is hard to believe that we're so close to the end of 2025 (and coming up to tax season!). While the natural topic of interest at this time of year would be year end finance/tax tips, I have a video about that and I'm also doing a free workshop at YES Montreal in mid December (stay tuned for more details).
Alternatively, I thought I would address some common questions I get asked at this time of year:
“Should I incorporate before December 31?”
A lot of sole proprietors start to think about incorporating at this time of year with a target date of January 1st.
While the beginning of a new year is certainly a good time, you can actually incorporate at any time. Also, a non calendar year end might be better for the simple reason that you might get more attention from your accountant (who is probably slammed with calendar year deadlines). The decision, ideally, should be based on your income level, need for liability protection, and/or long-term plans rather than time of year.
“Do I need to do anything right now to get ready for tax season?”
While you don’t necessarily need a full year-end process, especially if you are a one person shop, a little organization can be helpful.
The easiest starting point:
Make sure your expenses and receipts are organized
Ensure you have an accurate record of all sales
Separate business and personal accounts if you haven’t already
Do a quick review of your books to catch anything missing
If you are using QuickBooks Online, make sure your transactions are downloading regularly
“How much should I be saving for taxes?”
This is a question that is stressful for many business owners who aren't sure what their tax bill is going to be (especially those that are unincorporated or paying themselves dividends). So, while there’s no set percentage of an amount to save, my advice is to use this tool below to estimate your taxes owing:
https://www.wealthsimple.com/en-ca/tool/tax-calculator
I also have a couple of videos that might be helpful:
“Do I need to update my bookkeeping before the year ends?”
While I encourage everyone to do it (despite my own procrastination :)), it isn't mandatory. However, if you do wait until the last minute, it can make tax time unnecessarily stressful and there is always the risk that you might miss something.
If you are able to take some time before the end of the year, it can significantly help to reduce overwhelm and might even save you money by avoiding missed deductions.
“Can I still register for GST/HST?”
Yes — you can register at any time. If you’ve reached the $30,000 threshold (for total sales), over the last 4 quarters, or are getting close, now is a good time to evaluate where you stand.
Some people also register voluntarily before the new year to simplify their accounting going forward.
A related blog post on whether you should register: https://www.montrealfinancial.ca/blog/should-you-register-for-gsthst-and-qst-and-what-it-means-to.html
“Should I pay myself before December 31?”
If you are unincorporated i.e. a sole proprietorship or partnership, then you are taxed on the profits of your business so paying yourself (whether or not you withdraw money from your bank account) has no tax consequences.
This matters mainly for incorporated business owners deciding between salary and dividends.
Salary are declared for the calendar year
Dividends can be declared before year-end and recorded separately
The right choice depends on your overall income, benefits, and tax planning. You might want to look at other sources of income, your living expenses and expected needs in the future and smooth it out.
“Do I need to make RRSP or TFSA contributions now?”
RRSPs have a March 2nd deadline in 2026, so there’s no need to rush in December unless it aligns with your goals or you prefer to get it done (and of course the longer your money is invested, the more it can potentially earn).
TFSAs reset on January 1, which makes this a good time to review your contribution room. Note that contribution room accumulates from previous years so the amount for 2026 of $7,000 will simply added to the amounts that you have not yet contributed.
This is always one of the most common questions (at any time of year) especially for new business owners. While the answer depends on your situation, the general rule is that an expense must be reasonable and related to earning income. Think business-related supplies, software, advertising, professional fees, and home office expenses.
