Pocket-Friendly Expense Tracking for Canadian Businesses

There is no single rate. Federal personal income tax for 2026 runs through five brackets: 14%, then 20.5%, 26%, 29% and 33% on the highest band, and your province's brackets stack on top, so your combined marginal rate is the federal rate plus the provincial one. The 2026 federal basic personal amount is $16,452, tapering to $14,829 as net income rises from $181,440 to $258,482. Capital gains and Canadian dividends are taxed on a different basis.

CRA online filing for 2025 returns opened on 23 February 2026 and stays open until 29 January 2027. You can prepare a return before the service opens, but it cannot be transmitted, and slips such as T4s and T5s often arrive only in late February. Filing early makes sense if you expect a refund. If you expect a balance owing, you can still file early and pay by 30 April 2026.

Make it routine rather than an April scramble. Record income and expenses monthly, keep receipts and statements for six years from the end of the tax year they relate to, and check CRA My Account for slips, notices, balances and instalment reminders. Pay instalments when the CRA asks for them. Set aside a share of self-employment income as it arrives, and register for direct deposit. A mid-year review is when planning can still change the result.

Work it from your own figures rather than a rule of thumb. A corporation on active business income pays 9% federally on the first $500,000 for 2026, plus the provincial small business rate — 3.2% in Ontario, falling to 2.2% on 1 July 2026 — so reserve that share of profit as you earn it. A sole proprietor should set aside at their marginal personal rate plus CPP. Keep GST/HST collected in a separate account; that money was never yours.

File T5 slips and the related summary electronically through the CRA's internet file transfer or web forms service, reached from My Business Account, and give each recipient a copy of their own slip. The filing is due by the end of February for the previous calendar year. Web forms suits a handful of slips; internet file transfer suits an XML file exported from accounting software. Late slips draw a penalty that scales with slip count and lateness.

No. GST/HST you collect is not revenue: you hold it on the CRA's behalf and remit it. Report sales net of the tax on your T2125 or corporate financial statements, and post the tax collected to a liability account rather than income. Including it overstates both revenue and profit. If you are not registered and charge no tax, gross sales are simply the amounts you billed your customers.

A write-off is an expense deducted from income so that tax applies to a smaller amount. It is not a refund of what you spent: the saving equals the expense multiplied by your marginal rate. Employees may deduct very little, while a business or self-employed person can deduct reasonable costs incurred to earn income, though categories such as meals and entertainment, vehicles and home office are restricted. Keep receipts, because the CRA can ask for them years later.

Because you remit the tax you charged customers, less the GST/HST you paid on business purchases. Tax you collect was never your money, so when collections exceed your input tax credits, the difference is payable. The usual reasons a bill feels large are missed input tax credits, receipts too thin to support a claim, the quick method applying to your sales, or the collected tax having been spent as working capital. Bank it separately.

There is no fixed student refund. A refund is simply the tax withheld from your pay minus the tax you actually owe, so a student with modest earnings and some withholding often gets most of it back. Tuition amounts are a non-refundable credit: they reduce tax owing but do not create a refund on their own, and unused amounts carry forward to later years or can be transferred to a parent, grandparent or spouse within limits.

GST/HST applies to wholesale sales the same as retail, since Canada has no resale exemption certificate. A registered buyer charges tax on its own sales and recovers the tax it paid on inventory as an input tax credit, so the tax washes out through the chain and only the final consumer bears it. Provincial sales tax works differently: in British Columbia, Saskatchewan and Manitoba, goods bought for resale are generally exempt if you give the vendor your registration number.

There is no federal credit for children's sport, arts or activity fees, and Ontario's own children's activity credit ended years ago, so hockey, dance and camp registration is not deductible on your return. A few provinces still run their own activity credit, so check your province's information on canada.ca. Day camps and after-school care that let you work may instead qualify as child care expenses, which are normally claimed by the lower-income spouse.

The contributing spouse claims the deduction, against their own income and out of their own RRSP contribution room, even though the plan and the eventual withdrawals belong to the other spouse. That is the point of a spousal plan: a deduction now for the higher earner and taxable income later for the lower earner. Watch the attribution rule, which taxes a withdrawal back to the contributor for the withdrawal year plus the two preceding calendar years, capped at contributions made in that window.