Canadian Small Business Tax Filing Tips for 2026

Important Tax-Related Dates and Deadlines for Canadian Business Owners in 2026

When you need to file your 2025 return depends on whether you’re the owner of an incorporated business, a sole proprietor, a self-employed professional, or a regular employee. 

Here are the key dates to remember:

• February 23, 2026. NETFILE opens for business owners who want to get a head start on filing their returns. The exact day isn’t yet known as the CRA hasn’t announced the date.

• February 28, 2026. If you have employees, this is the last day to provide them with their T4 slips.

• March 2, 2026. The last day to contribute to your registered retirement savings plan (RRSP) for the 2025 tax year. Contributions to an RRSP help reduce your tax bill.

• March 31, 2026. Partnerships must file a partnership information return to the CRA by this date.

• May 1, 2026. May 1 is the deadline for employees to file their tax returns. It’s also the due date for any money owed to the government, including for self-employed individuals (even though the filing deadline is six weeks later).

• June 15, 2026. This deadline applies to most entrepreneurs, business owners, sole proprietors, and self-employed professionals (including those with side hustles) who must file their tax returns with the CRA.

If your business is incorporated, your tax-filing deadline is six months after the corporation’s fiscal year ends. For example, if the corporation’s fiscal year end is January 31, your tax return is due July 31. Any payments owed are due two months after the end of your corporation’s fiscal year.

There’s an exception to this rule if you have a Canadian-controlled private corporation with annual income of less than $500,000. If that’s the case, the payment deadline is three months after the end of the corporation’s fiscal year.

Penalties for a Late Filing

There’s a late-filing penalty if you owe money to the CRA. It’s 5% of the balance due, plus an extra 1% every month for up to 12 months.

That’s why you should file your taxes on time, even if you can’t pay what’s owed. Doing so will allow you to avoid paying a penalty, but you will still have to pay interest on the unpaid balance.

GST/HST Filing and Payment Deadlines

The deadlines vary based on your GST/HST filing period. They’re done either monthly, quarterly, or annually.

If the filing period is monthly or quarterly, the filing and payment deadlines are one month after the end of the reporting period.

For an annual filing period with a year-end of December 31, the 2026 filing deadline is May 1, and the payment deadline is June 15. For a yearly filing period with a year-end other than December 31, the filing and payment deadlines are three months after the fiscal year-end.

Documents Required for Filing

The two primary forms you’ll need to file are a T1, which is a standard tax return, and a T2125 (statement of professional or business activities). If you have multiple companies, you need to file a separate T2125 for each. On your T2125, you will have to enter all your business income and any expenses, such as business insurance.

If you work full-time and operate a business as a side hustle, you’ll need to enter your T4 information on your return and submit a T2125. 

Incorporated businesses must file a T2, the corporation income tax return.

What Happens If You’re Audited

There’s always the possibility of being audited. You may be chosen randomly or because there appears to be non-compliance with tax obligations. 

For that reason, don’t throw out any tax returns or related documents from the past six years. The CRA states: “Generally, you must keep all required records and supporting documents for a period of six years from the end of the last tax year they relate to.”

If you have hired an accountant or tax expert to help you or file your taxes, they can represent you in the event of a dispute or appeal with the CRA. 

Tip: Legal expense insurance provides funds to seek legal advice from an experienced lawyer if you are audited or wish to appeal a decision from the CRA.

If you did your taxes on your own, you can represent yourself or hire a lawyer to do so. Depending on the work required, hiring a lawyer may be costly, but it can save time and reduce the risk of errors. (Yet another reason to consider legal expense insurance.)

To reduce the chance of being audited, be aware of what can raise a red flag at the CRA:

• Having large deductions. While you can deduct many expenses for business purposes (such as meals, entertainment, and travel), you shouldn’t claim those you can’t remember or don’t have receipts for, whether for business or pleasure.

• Reporting recurring losses. Some businesses aren’t always profitable, but having a loss year after year will look suspicious, especially since you’re in business to make money.

• Owning a cash-intensive business. Restaurants, bars, salons, and convenience stores are just a few examples of cash-intensive businesses. There’s an opportunity here not to report all your income if a large portion of sales are in cash, which is why the CRA will be more likely to scrutinize your books.

• Employing family members. There’s no law against having your spouse or other members of the family working for you, but make sure you follow the rules.

• Writing off 100% of vehicle expenses. It will be rare for all your vehicle expenses to be for business use unless you have access to another vehicle. Any vehicle used for commercial purposes should be covered by a commercial auto insurance policy. In addition to adequately covering the car or truck you use for business, having this coverage can help prove your business vehicle expenses are legit. 

Your best defence in a CRA tax audit is to keep detailed records and receipts.

Planning and Getting Help

Even though your tax return might not be due right now, the time to start planning is. 

Zensurance highly recommends getting professional advice from a tax expert, a taxation lawyer, or an accountant for your small business.

They can advise you on the available deductions and credits and complete all required forms on your behalf. Of course, a cost will be involved, but trusting a tax expert to help will give you more time to focus on your business and help avoid errors that may lead to an audit.

Get the Right Liability Insurance for Your Small Business

Being financially secure and protecting your small business’s finances requires a comprehensive business insurance policy – and in many cases, business owners can deduct commercial insurance premiums they pay for coverage on buildings, machinery, and equipment.

Consider commercial property insurance in the event there are losses or damage to your property and contents, commercial general liability insurance to protect yourself in case a customer is injured or their property is damaged on your premises or because of your operations, and tools and equipment insurance to cover your transportable tools or equipment. 

Complete our online application for a free quote in under five minutes.

As Canada’s leading online small business insurance brokerage, Zensurance can get the right policy that suits your budget and addresses your risks from one of over 50 insurers in our partner network.

– Updated January 7, 2026.

– Reviewed by Brandon Bowie, Senior Broker & Team Lead, Professional Lines, Zensurance.