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Accounting and tax are two jobs that overlap. Accounting keeps the record of what came in and went out. Tax work turns that record into a return and a payment. For a sole proprietor filing a 2026 return, the usual deadline is June 15, 2027, but any tax owing is due April 30, 2027 (for 2025 these were June 15, 2026 and April 30, 2026), and the CRA says to keep records for six years.
What is the difference between accounting and tax work?
Bookkeeping is the daily part: recording sales, expenses and payroll, and matching them to the bank. Accounting builds on that with statements and a view of how the business is doing. Tax filing takes the year’s numbers and applies the rules.
The lines blur, and firms bundle them. We can’t tell you who’s best or what any of it costs, because we found no official source for fees or rankings. What you can do is decide which of the three you need and ask about that.
A simple way to sort it out: if your problem is “I don’t know what I made last month,” that’s bookkeeping. If it’s “I don’t know whether I’m doing well,” that’s accounting. And if it’s “what do I owe and when,” that’s tax.
Which records does the CRA expect you to keep?
The CRA describes records as all your accounting and financial documents, kept organized. That covers income and expenses, vehicle logs, property records and, where they apply, GST/HST and payroll records. Paper, electronic or a mix all work.
Six years is the standard period from the end of the last tax year the record relates to. There are exceptions. Records for a late-filed return run six years from the filing date, and records on long-term property or share registers can need to be kept indefinitely. Records normally have to be kept at your business or home in Canada unless the CRA agrees in writing to another place. The CRA’s page on how long to keep your records also says you need written permission before you destroy anything early.
| Situation | How long to keep records |
|---|---|
| Ordinary year | 6 years from the end of the last tax year they relate to |
| Late-filed return | 6 years from the filing date |
| Dissolved corporation | 2 years after dissolution |
| Long-term property, share registers | Can be indefinite |
What does the tax side cost you in a year?
Take an Ontario sole proprietor with $80,000 of net income. The self-employed tax calculator shows $8,698.44 of federal tax, $4,535.12 of Ontario tax and $8,892.90 of CPP, for $22,126.47, or 27.7% of income. You leave $57,873.53. It doesn’t include GST/HST, EI or expenses, and its deductions lower income tax without changing CPP, so treat it as a starting point.
Now think about timing. Instalments come due when you expect to owe more than $3,000 (the threshold is $1,800 for Quebec). The dates are March 15, June 15, September 15 and December 15. The tax instalments calculator splits an expected $9,000 of tax into four payments of $2,250. Good books are how you know that $9,000 figure in the first place.
What should you hand over at year end?
Whoever prepares your return will ask for roughly the same pile. A sales summary or the invoices behind it. Expense receipts, sorted by type. Bank and credit card statements for the business. Mileage logs if you claim a vehicle. GST/HST filings and payroll summaries if they apply. And last year’s return, so carried forward amounts don’t get lost.
Say Tomasz in Hamilton runs a small tile business. If his folder is ready by the end of January, the whole year-end job is a short conversation. If it’s a shoebox in March, it’s a long one, and tax time gets expensive in hours, whatever the hourly rate is.
When does an accountant pay for itself?
When the mistakes cost more than the fee. Selling a rental, running payroll, charging GST/HST or setting up a corporation are all cases where a slip is expensive. The corporate tax calculator shows how the rate structure changes once a company is involved. On the small business rate in Ontario, the combined figure is a derived blend of federal and provincial rates, so we’d verify it before planning around it.
For a one-person side job with a few invoices, a spreadsheet and the calculators may be enough. Nobody needs an annual package to track twelve sales.
Mistakes to avoid
Mixing personal and business spending is the big one. Waiting until April to look at the year is the next, because you can’t plan instalments, and you can’t check the GST/HST calculator against your sales if the sales aren’t recorded.
And don’t assume the person doing your books answers for what’s filed, because the return has your name on it, whoever typed the numbers in and however tidy the file looks. Ask for copies of everything, and never sign something blank.
What is the difference between tax accounting and financial accounting?
Financial accounting reports how the business is doing to its owner, a lender or a buyer, using statements such as an income statement and a balance sheet. Tax accounting takes the same underlying records and applies the tax rules to find the income that is taxed. The two results do not always match, because a cost can be treated one way in the statements and another way on the return. Equipment is a common case: the books spread its cost over its life, while the return uses capital cost allowance, so a business has two sets of numbers for one purchase.
A sole proprietor with a simple business often keeps only one set of records and uses it for both jobs. A corporation has to produce statements and a T2 return, so the gap between the books and the tax result is something its records need to explain.
What does small business accounting need to cover?
Small business accounting starts with the records the CRA expects: income and expenses, vehicle logs, property records and, where they apply, GST/HST and payroll records. Add a month-end habit of matching the books to the bank, and the year-end tax work becomes a short job instead of a rescue. Keep every record for six years from the end of the last tax year it relates to, and keep the deadlines in view: for 2026 the sole proprietor return is due June 15, 2027 and any tax owing is due April 30, 2027.
Where we got these figures
Record-keeping periods and the June 15 and April 30 dates come from Canada Revenue Agency pages read in September 2026. The 2026 return dates above are the usual ones, because the CRA hasn’t printed them yet. Instalment thresholds and dates come from the CRA, and the calculators use this site’s 2026 tax data. This site has no link with any accounting firm or government body.
Frequently asked questions
When is the deadline for self-employed people?
For the 2026 return the usual dates are June 15, 2027 to file and April 30, 2027 to pay. For 2025, filing was due June 15, 2026 and any balance owing April 30, 2026.
How much does an accountant cost?
We found no official fee source, so we do not quote one. Ask several firms what is included.
Do I need instalments?
Instalments apply when you expect to owe more than $3,000, or $1,800 in Quebec. Due dates are March 15, June 15, September 15 and December 15.
- Self-employed taxes in Canada: income, CPP and GST
How tax works when you are self-employed in Canada: reporting income and expenses, paying both halves of CPP, instalments and when to register for GST