Year-end bookkeeping checklist: what to close before and after December 31.

Why start year-end in November?

It is January 6. Your bookkeeper wants three things: the December statement for the Amex ending 1008, a count of what was on the shelf on December 31, and an answer on whether the $6,400 you moved from the company account to your own in August was salary, a dividend, or a loan.

The statement you can download. The August question you can answer, though the answer may cost you. The shelf count is gone. Whatever was there on New Year's Eve has been sold or restocked since, and the best anyone can do now is work backward from invoices and hope.

That is the case for starting in November. Year-end is mostly a January job, but a handful of decisions only count if you make them while the year is still open, and a few facts can only be recorded on the day. This checklist assumes a December 31 year end, which is the usual one for a sole proprietor and a common choice for a corporation. If your year ends in another month, the steps are the same and the dates move with it.

What has to happen before December 31?

Four things on the list have to be settled while the year is open. A decision made on January 4 is a 2027 decision.

Equipment you want to claim this year

Capital cost allowance (the tax version of depreciation) can usually be claimed once a purchase becomes available for use, which for most equipment means the earlier of the day you first use it to earn income and the day it is delivered and capable of doing its job. The invoice date does not decide it. A $4,200 laptop ordered on December 20 and delivered on January 8 is a 2027 asset. If a purchase is worth making this year, make sure it arrives this year.

A bonus to yourself or your staff

A corporation can deduct a bonus in the year it was incurred, as long as it is actually paid within 180 days of the year end. For a December 31, 2026 year end, the 180th day is June 29, 2027. Paid later than that, the deduction moves to the year the money goes out. The bonus has to be a real obligation by December 31, which in an owner-managed company usually means a directors' resolution, and it is payroll when it is paid, so source deductions come off it. Whether a bonus beats a dividend for you is a separate question, and our post on salary vs dividends covers it.

The holiday party

Meals and entertainment are generally deductible at 50 percent. An office party or similar event that every employee at a location is invited to is an exception, for up to six such events a year. Book the party to its own account, not to meals, so nobody halves it by accident in April.

The inventory count

If you hold stock, plan the count for December 31 or the last business day before it, and decide now who counts, what sheet they use, and how anything received or shipped that day is treated. Of everything on this list, only the count is impossible to redo later.

What about money I took out of the company?

If you run a corporation, every dollar you took out during the year has to end up as one of three things: salary, a dividend, or a loan from the company to you. Money that was never labeled sits in the shareholder loan account, and at year end that account gets read.

A loan from your corporation to you generally has to be included in your personal income. The main exception is repayment: if the loan is repaid within one year after the end of the corporation's tax year in which it was made, and the repayment is not part of a series of loans and repayments, it stays out of your income. For money taken out during 2026, with a December 31 year end, that means repaid by December 31, 2027. Repaying it on December 30 and borrowing it back on January 2 is the series the rule describes.

Which accounts have to tie out at year end?

Every account in the books with a statement behind it. Reconciling means matching the balance in your books to the balance on the statement, transaction by transaction, until the two agree on December 31.

• Every bank account and credit card, to the December statement. Include the card nobody uses and the savings account the bank opened for you in 2023.
• Loans and lines of credit, to the lender's year-end statement, with the payments split between interest (an expense) and principal (not one).
• Payment processors such as Stripe, Square, and Shopify. The payouts in your bank are sales minus fees minus refunds, and the books need all three, not the net.
• Payroll liabilities, so the balance owing matches what you withheld in December and remit in January.
• The GST/HST account, to the returns you filed. If it does not tie, find out why before you file the next one.

Then the two lists that are easiest to leave alone. First, invoices customers still owe you: go through them, decide which ones you will never collect, and write those off before you close the year, with a note of why. Second, bills you owe: anything for December that arrives in January belongs in 2026.

One more check if you are not registered for the GST/HST. Add up your taxable sales for the last four calendar quarters. Once they pass $30,000, you are no longer a small supplier and you have to register. Our GST/HST registration guide has the timing.

You probably already know, but a bank statement shows that you paid someone. It rarely shows what you bought, which is the part the CRA asks about. A year-end reconciliation with a receipt attached to every line over a few hundred dollars is the one you can defend.

What belongs in this year, and what belongs in next?

Accountants call this cut-off. Each sale and each expense goes in the year it belongs to, whatever day the money moved. If you keep your books on the accrual basis (recording income when you earn it and expenses when you incur them), these are the places it usually goes wrong.

Which slips are due in February?

If you paid anyone in 2026, you are probably filing information returns, the slips that tell the CRA what you paid and tell the person what to report.

• T4 slips for employees, including you if you paid yourself a salary.
• T4A slips for other payments, such as fees to some self-employed people.
• T5 slips if your corporation paid dividends, including to you.

All three are due by the last day of February after the calendar year. For 2026 that day is Sunday, February 28, 2027, and when a due date lands on a weekend the CRA treats a return received or postmarked on the next business day as on time. So the date to plan for is Monday, March 1, 2027.

If you are in construction and paid subcontractors, the T5018 runs on its own clock. It is due six months after the end of the reporting period you chose. Our T5018 filing guide covers who has to file it.

Slips are where a year of loose payroll and unlabeled withdrawals turns into forms with your name on them. If the payroll was reconciled every month and the shareholder loan was sorted in December, the slips mostly fill themselves in from the payroll reports.

When are the 2027 filing deadlines?

For a December 31, 2026 year end, the dates below are the ones that matter. The filing date and the payment date are often different, and the payment date usually comes first.

The three-month payment date for a CCPC depends on conditions about the small business deduction and the prior year's taxable income, so confirm it with whoever prepares your return rather than assuming it. Missing any of these has a cost, and our post on CRA late-filing penalties works through the math.

How long do I keep the 2026 records?

Generally six years from the end of the last tax year they relate to. For records that support your 2026 return, that runs to the end of 2032.

There are longer cases. File a return late, and the six years run from the date you filed it. Records about long-term assets, the share register, and anything else that would matter if the business were sold or wound up are kept indefinitely. The records also have to be kept in Canada, at your place of business or your home, unless the CRA has given you written permission otherwise. A cloud folder you can open from Canada does not count on its own if the servers are elsewhere.

The practical version: at the end of the close, export the year-end reports, the general ledger, and the reconciliations to one folder named for the year, and keep the receipts attached in the bookkeeping software. If the CRA asks about 2026 in 2029, that folder is what you send.

Sources and further reading