Whether or not you are required to file taxes for your business as a corporate business owner in Mississauga, it is always a good idea to be prepared and understand the different tax deadlines. Depending on your business structure, your corporate fiscal year-end (CYE) may differ from the calendar year. The cycle plays a vital role in the business as it helps to file accurate tax returns, maintain financial statements, and forecast future cash needs. In this blog, we will help you understand everything you need to know to choose the best corporate fiscal year-end date for your Mississauga business.

What is a fiscal year-end date, and why do businesses choose one over another?

The fiscal year-end (FYE) is the last day of the 12 months a company uses to calculate its annual financial statements. For most companies, the accounting period coincides with the calendar year, which means their year end is December 31. However, many businesses are not required to use the calendar year as their fiscal year.

What are the benefits of choosing a specific fiscal year-end date?

A few key benefits come with choosing the right year-end date for your business.

  1. It can help you save on taxes: Depending on when you file your taxes, you may take advantage of deductions and tax breaks.
  2. It can help you manage cash flow: A good handle on your cash flow is essential for any business. Knowing when your fiscal year ends allows you to better plan and budget for large expenses.
  3. It can help you stay organized: Having a set fiscal year-end date will help you stay on top of your finances. This will make it easier to prepare financial statements and tax returns.

What are the key factors to consider when choosing a fiscal year-end date?

There are a few very important key factors that you should consider when choosing a fiscal year-end date for your business.

  1. Taxes: As we mentioned before, choosing the right fiscal year-end date can help you save on taxes. Never forget to talk to your accountant or tax advisor to see if there are any tax advantages to using a specific date.
  2. Cash flow: As we also mentioned, your fiscal year-end can impact your cash flow. Be sure to consider the large expenses you may need to pay during the year and plan accordingly.
  3. Business cycle: Another factor to consider is your business cycle. Suppose your business has a slow period during the year. In that case, choosing a fiscal year-end that falls during that slow period may be advantageous. This way, you can definitely minimize your tax liability.

Can the fiscal year-end date be changed after it has been chosen?

Yes, the fiscal year-end date can be changed after it has been chosen. However, a few things to keep in mind if you change it

  1. You will need approval from the Canada Revenue Agency (CRA).
  2. You must file a notice of change with the CRA.
  3. You will need to file amended financial statements for any previous years affected by the change.
  4. You may have to pay some fee to the CRA if you change your fiscal year-end date.
  5. You must update your accounting software to reflect the change.

Making the switch can be a lot of work.

Final Thought

Making sure the corporate fiscal year-end date is one of the most important aspects of keeping the business ticking. If you are searching for a trusted Accounting firm like GTA Accounting, our advisory services will surely help you. Our team of tax accountants will be more than happy to help you with any questions. Contact us today! We hope we have given you something to think about, and you now feel more confident in choosing the best fiscal year-end date for your business. You may also want to read about Tax-Efficient Ways To Withdraw Money From Your Business.