7 Proactive Tax Tips Every New Female Business Owner Needs

Sole ProprietorBookkeepingCorporate Taxation

Jan 2

January in Canada is not just about fresh starts and resolutions.

It is also the ideal time for established corporation owners to take a close look at their financial records and owner compensation. For many women entrepreneurs, this season can set the tone for a year of clarity and confidence.

Proactive tax planning now can help you avoid costly errors, penalties, and last minute surprises during both corporate and personal tax filings. It is also your best window to optimize your personal tax liability and make the most of your RRSP contribution deadline.

Why January Matters for Corporate Owners

A common misconception among business owners is that tax planning is something you do at year end or right before filing. In reality, waiting until tax season can leave you scrambling to fix errors or missing out on valuable opportunities. Reviewing your books and owner pay in January gives you time to catch mistakes, adjust your compensation, and plan your salary versus dividend strategy for the year ahead.

This proactive approach is especially important if you want to reduce your personal tax liability or run RRSP calculations before the 2026 deadline!

Practical Steps for Proactive Tax Planning

Review Your Financial Records Early: Start the year by reconciling your books and ensuring all transactions are accurately recorded. This helps you spot discrepancies before they become bigger issues.
Assess Your Owner Compensation: Take a close look at how you paid yourself last year. Was it mostly salary, dividends, or a mix. An owner compensation review in January allows you to adjust your approach for the coming year, aligning with your personal and corporate tax strategy.
Plan Your Salary vs Dividend Mix, RRSPs, and Childcare Deductions: The right balance between salary and dividends impacts your corporate taxes, your personal tax liability, your RRSP contribution room, and your ability to claim certain deductions. Salary creates RRSP room and is required to claim the childcare deduction. If you are the lower income spouse and pay childcare, being on salary can unlock significant personal tax savings.
Maximize RRSP Contributions: Calculate your RRSP room early based on your previous year’s salary. Making contributions before the RRSP contribution deadline can significantly reduce your personal tax bill.
Set Aside Funds for Tax Payments: Estimate your corporate and personal tax obligations now so you are not caught off guard by large payments later in the year.
Document Major Changes: If you are planning to change your compensation structure or make significant business investments, document your rationale and consult with your accountant.
Schedule a Professional Review: A quick check in with your CPA in January can help you confirm your strategy and avoid common pitfalls.

Real World ExamplE

A new client came to me after paying herself strictly through dividends for years. On the surface, it looked fine. But once we reviewed her full situation, we uncovered that she was the lower income spouse in her household and paying childcare for multiple children. Because dividends do not qualify for the childcare deduction, she had been missing out on a huge personal tax saving opportunity.

By switching part of her compensation to salary, she was suddenly eligible to claim the childcare deduction at personal tax time. The result was significant tax savings for her family and a much more efficient overall tax strategy. This type of planning only happens when you are actively reviewing owner compensation, not reacting at filing time.

Proactive tax planning is not just about compliance.

It is about making informed decisions that support your business and personal goals. By reviewing your financial records and owner compensation in January, you can avoid surprises, optimize your tax position, and start the year with confidence.