Q3 2026 — JULY
Mid-Year Tax Checkup: A Q3 Action Plan for Toronto Business Owners
6 min read | BBS Accounting Blog
Halfway through 2026 is the ideal time to review your numbers, catch tax surprises early, and adjust your plan. Here’s a practical Q3 checklist for Toronto and GTA business owners.
By July, your business has six months of real financial data behind it — and six months of runway left to act on it. Too many Toronto business owners treat tax planning as a once-a-year scramble in March. The businesses that consistently pay less tax, avoid CRA surprises, and sleep better at night are the ones that pause at mid-year, look honestly at the numbers, and make adjustments while there’s still time to matter. This is your Q3 checklist.
1. Compare Actual Results to Your 2026 Forecast
Pull your year-to-date income statement and compare it against the budget or projection you set in January. Is revenue tracking ahead or behind? Are your gross margins holding up against rising costs? If your corporation is on track to earn significantly more than expected, you have time to plan around it — additional RRSP room for an owner-manager, a higher salary/dividend mix decision, or accelerated capital purchases before year-end. If results are behind plan, this is the moment to revisit instalment payments before you overpay the CRA for the rest of the year.
2. Revisit Your Salary vs. Dividend Mix
For owner-managers of Canadian-controlled private corporations (CCPCs), the salary-versus-dividend decision isn’t a one-time choice — it should be revisited as profitability changes. Salary creates RRSP contribution room and CPP credits but triggers payroll remittances and CPP/CPP2 contributions on both the corporate and personal side. Dividends avoid CPP entirely but don’t build RRSP room and may affect personal tax credits differently depending on whether they’re eligible or non-eligible dividends. With CPP2 contributions now firmly part of the payroll landscape on earnings between the Year’s Maximum Pensionable Earnings and the Year’s Additional Maximum Pensionable Earnings, this trade-off deserves a fresh look at mid-year, particularly if your compensation plan was set before you knew how 2026 would actually perform.
3. Check Your Quarterly Instalment Payments
If you or your corporation pay tax by instalments, the September 15 instalment is your next deadline (more on this in our companion article on Q3 instalments). Mid-year is the right time to confirm your instalment base is still appropriate — paying instalments based on a prior, higher-income year when your business has slowed in 2026 means you’re giving the CRA an interest-free loan you don’t need to give.
4. Review Payroll, CPP2, and Benefits Compliance
Mid-year is a natural checkpoint to confirm payroll is calculating CPP, the CPP2 second additional contribution, and EI correctly, especially for any employees who changed roles, received raises, or crossed pensionable/insurable earnings thresholds partway through the year. Errors caught in July are far easier (and cheaper) to fix than errors discovered during T4 preparation in February.
5. Look for Summer-Specific Deductions
Hired summer students or co-op placements? You may be eligible for federal or Ontario hiring incentives depending on the program and sector — worth confirming with your accountant before assuming eligibility. Business travel, client entertainment, and conference attendance also tend to spike in Q3; keep clean, contemporaneous records (not just credit card statements) so these deductions hold up if the CRA ever asks.
6. Start Thinking About Capital Purchases
If you’re planning equipment, vehicle, or technology purchases for the business, timing matters. Assets put into use before your corporation’s fiscal year-end may qualify for capital cost allowance (CCA) in the current year, including enhanced first-year CCA rules that remain available for certain eligible property. Waiting until December to make these decisions often means rushed purchases and missed opportunities to structure them properly.
| Q3 Mid-Year Checklist at a Glance | |
| Financial review | Actual vs. budget, margin trends |
| Compensation | Salary/dividend mix, RRSP room impact |
| Instalments | Confirm Sept 15 instalment is right-sized |
| Payroll | CPP, CPP2, and EI calculating correctly |
| Deductions | Summer hires, travel, professional development |
| Capital assets | Plan purchases for CCA timing |
Why a Mid-Year Review Pays for Itself
The value of a Q3 checkup isn’t just about catching errors — it’s about having options. By the time December arrives, many tax strategies (restructuring compensation, adjusting instalments, timing a transaction) become much harder or impossible to implement retroactively. A 60- to 90-minute review with your accountant in July or August can shape decisions that meaningfully reduce what you owe when 2026 wraps up.
Talk to BBS Accounting
Every business and every personal tax situation is different. If you’d like a clear, practical plan tailored to your numbers, BBS Accounting’s Toronto-based team is here to help — from corporate and personal tax planning to bookkeeping, payroll, and CRA representation.
Book a consultation: www.bbsaccounting.ca
Call us: (416) 555-0199 | Email: in**@***********ng.ca
BBS Accounting | Toronto, Ontario
This article is provided for general informational purposes only and does not constitute professional accounting, tax, or legal advice. Tax rules and CRA figures referenced are current as of publication and are subject to change. Please consult a BBS Accounting professional regarding your specific circumstances before making financial decisions.