Year-end for the self-employed: getting your numbers ready before December 31
An invoice sent on December 30 and paid on January 15: which year does it count in? For almost every self-employed worker, the year the work was done, not the year the money came in. That one rule explains why December shapes so much of your tax return. Here is the year-end checklist to follow before December 31: invoices, purchases, receipts and tax instalments, with the dates that follow through June 2027.
Why December 31 matters so much
If you run your business in your own name (a sole proprietorship), your fiscal period generally follows the calendar year: it ends on December 31. The Canada Revenue Agency (CRA) lets you choose a different year-end with a specific form (T1139), but that is the exception.
The second rule explains why December is so busy. Except for farmers, fishers and self-employed commission salespeople, self-employment income must be reported using the accrual method. In practice:
- you report income in the fiscal period in which you earn it, no matter when you are paid;
- you deduct an expense in the fiscal period in which you incur it, no matter when you pay it.
In other words, what counts is not your bank balance on December 31, but what you delivered and what you bought during the year.
Invoices to send before you close the year
Since income counts when it is earned, a forgotten invoice does not push back the tax: it only muddles your numbers. A painter who finishes a living room on December 22 and invoices on January 8 still earned that income in 2026.
| Situation on December 31, 2026 | Year of the income (accrual method) |
|---|---|
| Cleaning done December 18, invoiced December 20, paid January 10 | 2026 |
| Painting job finished December 22, invoiced in January | 2026 |
| Deposit received in December for work starting in March | Check: the work is not done yet |
| Seasonal snow removal contract paid in advance for November to April | Check: part of the service will be provided in 2027 |
The last two rows are cases where the timing of the income depends on the facts (what has actually been provided, what the contract says). That is exactly the kind of question to ask an accountant, or the CRA and Revenu Québec, rather than guessing.
Your December income checklist:
- List all finished work that has not been invoiced; send the invoices before the 31st.
- List your receivables: who owes you what, and since when. Follow up on late invoices.
- Make sure every invoice shows your GST and QST numbers if you are registered; the rules are summarized in GST and QST: when must a self-employed worker register?.
- For contracts signed on GPP Emploi, review the delivered milestones: once a milestone is delivered, the client has 72 hours to accept or dispute it, and without a response it is accepted automatically. A milestone delivered on December 30 will therefore be accepted by early January at the latest.
Purchases: now or later?
The December reflex is to "buy something to pay less tax". First understand why that is almost never a saving in itself. A deductible expense lowers your taxable income; it does not lower your tax by the same amount. The real saving equals the expense multiplied by your marginal tax rate.
Sample calculation (hypothetical rate, for illustration): if your combined marginal rate is 30%, a $1,000 deductible purchase cuts your tax by about $300. The purchase still costs you $700. If you did not need the item, you are out $700.
Next, not all purchases are deducted the same way:
| Type of purchase | Tax treatment | Examples |
|---|---|---|
| Current expense | Deducted in the year it is incurred | Fuel, salt and grit, cleaning products, small supplies, advertising |
| Durable property (capital asset) | Deducted over several years through capital cost allowance (CCA) | Snowblower, trailer, commercial mower, scaffolding, vehicle |
For durable property, keep two points in mind. A purchase made on December 30 is not fully deducted in 2026: only part of it goes into the year, depending on the class of property and the first-year rules, which have changed several times. And as a general rule, the property must be available for use before the end of the fiscal period to count in that year. A trailer ordered but delivered in February plays no part in your 2026 numbers.
So the right question is: "what do I really need for next season?". If the purchase is planned anyway, making it in December can move a deduction forward by a year. For a major purchase, run the numbers with an accountant.
Receipts and records to gather
An expense you cannot prove may not be accepted. The CRA requires you to keep records and supporting documents for six years from the end of the last tax year they relate to. Receipts from 2026 should therefore be kept until at least the end of 2032.
Your December checklist:
- receipts for fuel, vehicle maintenance and repairs;
- a log of your business trips (date, destination, purpose, kilometres), if your vehicle is also used personally;
- invoices for tools, equipment and supplies;
- cellphone and Internet statements, with the share used for work;
- proof of insurance (civil liability, commercial vehicle);
- subcontractor invoices and proof of payment;
- copies of every invoice you issued and every contract.
A simple habit: one folder per month and a photo of each receipt the same day. If a receipt is missing, ask the supplier for a copy now rather than in April.
Instalments: check before December 15
An employee pays tax on every paycheque through source deductions. A self-employed person has no deductions at source: that is the role of instalments, which spread tax payments over the year instead of paying everything in the spring.
The federal rule. For a Quebec resident, the CRA requires instalments in 2026 if net tax owing is more than $1,800 for 2026 and was above that same threshold in 2025 or 2024. Elsewhere in Canada, the threshold is $3,000. The due dates are March 15, June 15, September 15 and December 15.
The Quebec rule. Quebec's Taxation Act also provides for four payments to Revenu Québec, on the same dates. An individual is exempt if net tax does not exceed the instalment threshold for the year, or for each of the two preceding years. Revenu Québec sends its own notices; these are two separate payments.
Sample calculation (hypothetical figures): a landscaping contractor expects federal net tax of $2,400 for 2026; it was $2,100 in 2025. Both conditions are met, so federal instalments are required. Paying based on the estimate, each instalment is one quarter, or $600. If the first three were missed, paying the balance on December 15 limits the interest, which runs from each missed due date.
Before December 15, compare what you have already paid with the tax you expect for 2026, federally and provincially. If your year was very different from plan, an accountant can help you adjust the last payment.
The calendar through June 15, 2027
For a sole proprietorship with a December 31 year-end, here are the dates to put in your calendar.
| Date | What happens |
|---|---|
| Tuesday, December 15, 2026 | Last 2026 instalment (federal and Quebec) |
| Thursday, December 31, 2026 | End of the fiscal period; last day for income earned and expenses incurred to count in 2026 |
| Monday, March 15, 2027 | First 2027 instalment, if required |
| Friday, April 30, 2027 | Deadline to pay any 2026 balance owing; for an annual GST filer with a December 31 year-end, GST payment deadline |
| Tuesday, June 15, 2027 | Deadline to file the income tax return of a person who carried on a business (and their spouse); same date for the annual GST return in that case |
The most common trap is mixing up the last two rows. You have until June 15 to file your return, but any balance owing must be paid by April 30; after that, interest is added. For your QST return, check your reporting period and deadlines with Revenu Québec.
Use the quiet weeks of January to get ready for the next season: update your storefront and profile on the self-employed page, review your rates with Setting your hourly rate as a self-employed worker: the simple method and keep an eye on quote requests. If you are just starting out, all the basic steps are in Becoming self-employed in Quebec: the steps from A to Z.
In short
- Unless you chose otherwise, a sole proprietorship's fiscal period ends on December 31, and income is reported when earned, not when paid.
- Invoice all work finished before December 31 and list your receivables; deposits and seasonal contracts paid in advance should be checked with a professional.
- Do not buy just for the deduction: the saving is only worth your marginal rate, and durable property is deducted over several years.
- Gather your receipts and mileage log; keep them six years after the end of the year they relate to.
- Check your instalments before December 15, then remember two dates: payment by April 30, 2027, filing by June 15, 2027.
Frequently asked questions
What is the tax filing deadline for self-employed people in Quebec?
A person who carried on a business has until June 15 of the following year to file, both federally and in Quebec, and so does their spouse. For the 2026 tax year, that is June 15, 2027. Any balance owing must still be paid by April 30, 2027.
Does a December invoice paid in January count in the current year?
Generally, yes. Self-employed people use the accrual method: income is reported in the year it is earned, no matter when it is received. Farmers, fishers and self-employed commission salespeople are the exceptions.
Do I have to pay tax instalments as a self-employed worker?
Federally, a Quebec resident must pay instalments if net tax owing is more than $1,800 for the current year and was above that threshold in one of the two previous years. Revenu Québec has its own rules and sends its own notices. The due dates are March 15, June 15, September 15 and December 15.
How long should I keep my business receipts?
The CRA asks you to keep records and supporting documents for six years from the end of the last tax year they relate to. Receipts from 2026 should therefore be kept until at least the end of 2032.
Is it worth buying equipment in December to lower my taxes?
Only if you need it anyway. A deductible expense only saves your marginal rate, and durable property such as a snowblower is deducted over several years. For a large purchase, run the numbers with an accountant.
Sources
- Méthodes de comptabilité
- Exercice aux fins de l'impôt sur le revenu
- Qui doit en payer - Devoir payer ses impôts par acomptes provisionnels
- Devoir payer ses impôts par acomptes provisionnels
- Les entreprises ont différentes dates limites de production et de paiement – Voici un aide-mémoire
- Où conserver vos registres, pendant combien de temps et comment obtenir la permission de les détruire avant la fin du délai de conservation
- I-3 - Loi sur les impôts, article 1000
- I-3 - Loi sur les impôts, article 1026
