Year-End Tax Moves for the Self-Employed Before December 31, 2026

For a self-employed Canadian with a December 31 year-end, most 2026 tax moves close on December 31, 2026. Expenses count in the year you incur them, the year-end odometer reading anchors your vehicle claim, and the date equipment becomes available for use decides whether it earns capital cost allowance in 2026. December 15 is the last 2026 instalment date. RRSP contributions can wait until March 1, 2027, the balance is due April 30, 2027, and the return June 15, 2027. This is a calm checklist of what actually has to happen before the year turns, and what doesn’t, with every rule linked to the CRA page it comes from.

Quick answer (as of October 2026):

• By December 15: pay the last 2026 instalment, if instalments apply to you.
• By December 31: incur any 2026 expenses, decide on bad debts, record each vehicle’s odometer reading, and have any equipment you’re buying for 2026 available for use.
• Can wait: the RRSP contribution (to March 1, 2027), paying the balance (April 30, 2027), filing (June 15, 2027).
• Not law yet: the Productivity Mega Deduction announced September 15, 2026.

What has to happen by December 31, 2026

Self-employed individuals generally have to use a December 31 year-end, and all self-employment income other than farming, fishing and commission income must be reported on the accrual method (CRA guide T4002). Under the accrual method you report income in the fiscal period you earn it and deduct expenses in the fiscal period you incur them, whether or not you pay them in that period. That one rule explains most of what December is about:

• Expenses incurred in 2026 are 2026 expenses. A contractor’s invoice for work done in December 2026 that you pay on January 10, 2027 generally belongs on your 2026 Form T2125.
• Prepaid expenses follow the benefit. On the accrual method, the CRA says you claim a prepaid expense in the year or years you get the related benefit. Paying 2027 rent or a 2027 annual plan in December does not pull that cost into 2026.
• Bad debts need a decision in the year. You can deduct a bad debt if you already included the receivable in income and you determined in the year that it is bad. If a client invoice from earlier in 2026 is clearly not going to be paid, make that call, and note why, before December 31.
• The odometer reading. The CRA asks you to record the odometer reading of each vehicle at the start and end of the fiscal period, alongside a log of business trips (date, destination, purpose, kilometres). With a December 31 year-end, one photo of the dashboard on December 31 closes your 2026 log and opens 2027. Our vehicle expenses guide explains how that reading turns into your business-use percentage.

Buying equipment in December: CCA, the AII and the proposed Mega Deduction

Equipment you buy for the business isn’t deducted like a regular expense. It goes into a capital cost allowance (CCA) class and is written off over time. Three rules decide what a December purchase does for 2026.

1. The available-for-use rule

You can usually claim CCA on a property when it becomes available for use (CRA guide T4002, chapter 4). For property other than a building, that’s usually the earliest of: the date you first use it to earn income; the second tax year after the year you acquire it; the time just before you dispose of it; or the time it is delivered or made available to you and is capable of producing a saleable product or service. In plain terms, a laptop ordered on December 29 that arrives on January 5 is generally a 2027 asset, not a 2026 one.

2. The class rate and the half-year rule

Each class has its own rate. As listed in T4002: Class 50 (55%) for general-purpose computer equipment and systems software; Class 8 (20%) for furniture, appliances, machinery, tools costing $500 or more per tool and other equipment; and Class 12 (100%) for tools, medical or dental instruments and kitchen utensils that cost less than $500, as well as computer software that isn’t systems software. Normally the half-year rule lets you claim CCA on only half of a year’s net additions. The CRA notes that most small tools in Class 12 aren’t subject to the half-year rule and are fully deductible in the year of purchase. You also don’t have to claim the maximum: you can claim any amount from zero to the maximum allowed in a given year, and the CRA notes that if you do not have to pay income tax for the year, you may not want to claim CCA, because claiming reduces the balance left to claim in future years.

3. The Accelerated Investment Incentive (current law)

As of October 2026, the Accelerated Investment Incentive (AII) applies to eligible property acquired after November 20, 2018 that becomes available for use before 2028. For property that would normally be subject to the half-year rule and becomes available for use from 2024 to 2027, the CRA says the enhanced first-year allowance is two times the normal first-year CCA deduction. For property bought in December 2026, that’s the rule in force today.

4. The Productivity Mega Deduction (proposed, not law)

On September 15, 2026, the Department of Finance announced the Productivity Mega Deduction, which would provide immediate expensing on a permanent basis for most depreciable property acquired on or after September 15, 2026. It excludes property such as Class 1 and 3 buildings, Class 14 and 14.1 property, Class 51 pipelines and certain vehicles in Classes 10 and 10.1. The release says rules would restrict individuals, and partnerships with individual members, from using it to create or increase a loss, and property that doesn’t qualify keeps the existing AII. As of October 7, 2026 this exists as draft legislative proposals. It isn’t enacted, and its final shape for a sole proprietor’s Form T2125 isn’t settled. Until it is enacted, the rules in force are the existing CCA rules and the AII.

A worked example: a $2,000 laptop

Say you need a $2,000 laptop for the business (Class 50, 55%). Illustrative first-year CCA on your 2026 return, depending on timing and on which rules apply:

Scenario	First-year CCA on the 2026 return
Normal half-year rule, no incentive (for comparison): $2,000 × 55% × ½	$550
Available for use by Dec 31, 2026 under the AII (current law): two times the normal first-year CCA	$1,100
Acquired on or after Sep 15, 2026 and available for use by Dec 31, 2026, if the proposed Mega Deduction is enacted as announced (immediate expensing applies in the year the property becomes available for use; subject to the loss limits for individuals)	Up to $2,000
Arrives and is first used in January 2027	$0 on 2026; the claim starts on the 2027 return

The calm reading of that table: a deduction lowers your taxable income, so it saves you your marginal tax rate on the CCA amount, never the $2,000 itself. Timing moves a deduction between years. It doesn’t make the purchase free: for a laptop the business needs anyway, December timing changes which year gets the deduction; for one it doesn’t need, the purchase costs more than the tax it saves. Our CCA calculator runs your own numbers by class.

December 15, 2026: the last instalment of the year

You have to pay 2026 instalments if your net tax owing is more than $3,000 ($1,800 in Québec) for 2026 and also was for either 2025 or 2024 (CRA). If that applies to you, the 2026 dates are March 15, June 15, September 15 and December 15. December 15, 2026 falls on a Tuesday, so there is no weekend shift. The CRA’s prescribed rate on overdue amounts is 7% for October 1 to December 31, 2026, and the CRA says instalment interest is compounded daily at the prescribed rate, which is what a late or short instalment accrues. If September was missed or short, our September catch-up guide shows how a December payment and contra interest soften it, and the CRA instalment calculator shows your per-quarter figure.

VRITTI sets this aside for your province as income lands, so the December 15 money is already earmarked when the date comes. VRITTI is coming soon to the App Store: join the waitlist.

What can wait until 2027

• RRSP contributions for 2026: until March 1, 2027. The CRA defines the RRSP contribution year as ending on the 60th day of the following year. The 60th day of 2027 is Monday, March 1, 2027. As of October 7, 2026 the CRA hasn’t yet posted that exact date for the 2026 year (its page shows March 2, 2026 for 2025), so confirm it in January. Whether a dollar is better in an RRSP or in your instalments is a separate question, covered in RRSP vs CRA instalment payment.
• Paying the 2026 balance: April 30, 2027. Filing the 2026 return: June 15, 2027. The CRA’s rule for self-employed individuals is to file by June 15 and pay any balance by April 30 (its current pages show the 2025-year dates, June 15 and April 30, 2026). Applied to the 2026 tax year, those dates are June 15, 2027 (a Tuesday) and April 30, 2027 (a Friday). The later filing date doesn’t move the payment date.
• Sorting receipts into T2125 lines. As long as the expense was incurred in 2026 and you keep the records, the categorizing can happen in January. Our Form T2125 line-by-line guide maps each expense to its line.

Your key dates, October 2026 to June 2027

Date	What	Who
Oct 31, 2026 (Saturday), so on time by Mon Nov 2	GST/HST return and payment for July–September 2026	Quarterly GST/HST filers
Tue Dec 15, 2026	Last 2026 income tax instalment	Anyone the $3,000 / $1,800 two-year test applies to
Thu Dec 31, 2026	Year-end: expenses incurred, bad debts decided, odometer recorded, equipment available for use	Sole proprietors with a calendar year-end
Mon Mar 1, 2027	RRSP contributions deductible for 2026 (60th-day rule; confirm on canada.ca)	Anyone with RRSP room
Fri Apr 30, 2027	2026 balance owing due	Everyone with a balance
Tue Jun 15, 2027	2026 return due	Self-employed individuals and their spouses or partners

When a due date falls on a Saturday, Sunday or public holiday recognized by the CRA, the CRA considers a payment on time if it is received on the next business day, and a return on time if it is received or postmarked on or before the next business day. Quarterly GST/HST filers file and pay one month after each period ends.

A note on 2027

As of October 7, 2026, the CRA hasn’t published 2027 CPP contribution rates or maximums, or the Q1 2027 prescribed interest rate. Neither changes anything you do before December 31: your 2026 set-aside and your 2026 return use 2026 numbers. For how CPP works on self-employment income this year, see CPP for the self-employed in 2026. For the full picture of what you owe and when, start at our self-employed taxes in Canada hub.

Sources

• CRA, T4002 Chapter 1: General information (December 31 year-end; accrual method for all self-employment income except farming, fishing and commission income; expenses deducted in the period incurred, paid or not)
• CRA, T4002 Chapter 3: Expenses (motor vehicle records and odometer readings at the start and end of the fiscal period; prepaid expenses; bad debts)
• CRA, T4002 Chapter 4: Capital cost allowance (available-for-use rules; half-year rule; claim zero to the maximum, and you may not want to claim CCA in a year you owe no income tax; Class 8 20%, Class 12 100% and tools under $500, Class 50 55%)
• CRA, Accelerated Investment Incentive (acquired after November 20, 2018, available for use before 2028; two times the normal first-year CCA for half-year-rule property available for use 2024 to 2027)
• Department of Finance Canada, September 15, 2026: Productivity Mega Deduction (proposed; property acquired on or after September 15, 2026; exclusions; loss limits for individuals; AII continues for property that doesn’t qualify)
• CRA, Instalment due dates (March 15, June 15, September 15, December 15, 2026; next-business-day rule)
• CRA, Instalment interest and penalty charges (instalment interest compounded daily at the prescribed rate)
• CRA, Who has to pay instalments ($3,000, or $1,800 in Québec, for 2026 and either 2025 or 2024)
• CRA, Prescribed interest rates for October 1 to December 31, 2026 (7% on overdue taxes, CPP contributions and EI premiums)
• CRA, RRSP contribution year (ends on the 60th day of the following year)
• CRA, Line 20800: RRSP deduction (March 2, 2026 deadline for the 2025 tax year)
• CRA, Due dates and payment dates (self-employed: file by June 15, pay by April 30)
• Canada.ca, 2026 tax deadlines for Canadian businesses and self-employed individuals (GST/HST quarterly filers: one month after the period; weekend and holiday rule)

This article explains CRA rules in plain language. It is an estimate and general information, not tax advice for your situation. Rules, rates and proposed measures change; check the current canada.ca page, or a qualified accountant, before relying on a number.

Last verified against canada.ca: October 7, 2026.