The first month of 2025 is almost over and the tax season 2025 is almost approaching. You might think when is tax season 2025 in Canada?
The final deadline to file your taxes for 2025 is April, 30. Yes, you heard it right!
So as everyone is focused on adopting strategies for a smooth income tax filing experience, especially as a business owner, this is a sign for you to give this blog a read.
We have compiled a detailed guide for you regarding the latest updates from when does tax starts in 2025 to the tax season deadline in 2025. Moreover, there will be helpful strategies for you to adopt either as a small business owner or an individual trying to file their personal taxes hassle-free.
Major Changes For Tax Return 2025 in Canada
- Corporate tax rate adjustments:
If you are a business owner in Canada, there’s a major update undergoing approval. It’s been reported that the corporate taxes in 2025 will be reduced from 21% to 15%. So fingers crossed for this tax season 2025 Canada update.
- Enhanced IRS reporting requirements:
The Internal Revenue Service (IRS) has set stricter reporting requirements for 2025. These updates are particularly concerning travel, meals, and other business expenses. Additionally, the threshold for Form 1099-K reporting has been lowered, requiring attentive tracking of even minor online sales transactions.
- Retirement plan tax credits:
According to this tax season 2025 update, businesses establishing new retirement plans can now benefit from tax credits of up to $5,000 to offset setup costs. This initiative aims to encourage more businesses to offer retirement benefits to their employees.
If you want to explore detailed updates for the tax season 2025 in Canada including changes in tax numbers for RRSP contribution plans, personal taxes, CPP contributions, and many more, read our latest blog here.
4 Helpful Strategies For Business Owners To Tackle Tax Season 2025
If you are a business owner worried about the tax filing deadline 2025 in Canada, it’s time to take a sigh of relief. These 4 strategies will help you deal with the stressful tax season 2025 easily with great prior support if you apply them to your business.
- Deeply understand your business structure:
First things first! The most important aspect of a stress-free tax filing is a good understanding of what your business structure is. Whether you are operating as a sole proprietorship, corporate business, partnership, or limited liability. If you have a good understanding of your business structure, you can align your future business strategy for maximum deductions and tax benefits.
- Maximize available deductions:
You might think about what deductions are available for your business to utilize. Well, typically you can easily claim these 2 tax deductions as a registered business owner:
- Qualified Business Income (QBI) deduction: You can optimize the 20% QBI deduction by balancing wages and distributions appropriately.
- State-specific opportunities: You can utilize state-level deductions, such as entity-level tax deductions to bypass the State and Local Tax (SALT) cap.
- Implement accountable plans:
Accountable plans mean keeping each and every detail of your business finances accurate and credible. It is to make sure you already have all sorts of finance details in hand when the tax season starts.
Generally, these include technical expenses, location, business-related vehicle journeys, meals, etc. You can claim great deductions for your taxes in the tax season 2025 as a registered business owner if you have credible records of your business finances.
- Enhance retirement contributions:
Maximize contributions to retirement accounts such as 401(k)s or IRAs. For those ineligible for direct Roth IRA contributions due to income limits, backdoor Roth conversions remain a viable strategy.
It basically means to optimize your retirement savings by contributing the maximum allowable amount to tax-advantaged accounts like 401(k)s and Individual Retirement Accounts (IRAs). These accounts offer tax benefits that help grow your savings for retirement. Let’s say you’re a high-income earner and your salary exceeds the income limit for direct Roth IRA contributions in 2025. You decide to use the Backdoor Roth IRA strategy instead.
Step 1: Contribute to a Traditional IRA
- You deposit $7,000 (the maximum 2025 contribution limit for those under 50) into a Traditional IRA.
- Since you earn too much to deduct this contribution from your taxes, it’s considered a nondeductible contribution.
Step 2: Convert to a Roth IRA
- A few days later, you convert the full $7,000 from your Traditional IRA to a Roth IRA.
- Because you haven’t earned any investment growth yet, there is no taxable gain on the conversion.
- If there was a small gain (e.g., $100), you would owe taxes only on that $100.
Step 3: Money Grows Tax-Free
- Your $7,000 now sits in your Roth IRA and grows completely tax-free over time.
- When you retire, you can withdraw it tax-free, unlike a Traditional IRA, where you owe taxes on withdrawals.
CONCLUSION
As a business owner in Canada and a Canadian citizen, you are almost heading towards the tax season 2025. In order to avoid any complexities during the tax filing process and penalties, it is important to stay updated with the CRA’s tax changes on a regular basis.If you are looking for a small business tax accountant near me in Canada, we are here to help you out. As the tax season 2025 is approaching, Numeracy Accounting Solutions is actively helping business owners claim maximum deductions and file their taxes easily. Contact us today to enjoy a hassle-free tax filing deadline in Canada.