Getting a tax refund can feel like a nice little surprise — like finding cash in last year’s winter coat. But instead of treating it like “fun money,” this could be a great chance to make moves that improve your financial health, both personally and for your business. Here are a few smart ways to put that refund to work:
Pay your tax instalments
If you're a sole proprietor, corporation, GST registrant or own rental property, those quarterly tax instalments are key to staying onside with the CRA. Paying them on time helps you avoid nasty surprises — especially now that the CRA’s interest rate is hovering around 8%.
Pay off high-interest debt
Credit card debt and other high-interest loans can drain your cash flow (think 20% interest rate) and limit your future options. Using your refund to knock down that balance can save you a lot in interest — and improve your credit score at the same time.
Start with personal debt first — it’s not tax-deductible, unlike business debt or debt used to earn income.
If you’re following the Dave Ramsey method, consider the “debt snowball”: pay off the smallest debt first for that satisfying win, then roll that payment into the next one.
👉 Need a plan? Check out our blog on how to manage small business debt.
Build your emergency fund
Haven’t started one yet? Your refund is a great place to begin. Aim to build a buffer that covers three to six months of business and personal expenses. That way, if something unexpected hits, you’re ready.
Top up your RRSP or TFSA
Retirement might feel far off, but contributing to a Registered Retirement Savings Plan (RRSP) or Tax-Free Savings Account (TFSA) now can give you an immediate tax break — and set you up for the long term. TFSAs are great for flexibility, while RRSPs help reduce your taxable income.
👉 Here’s how to plan and save for retirement as a small business owner.
Grow your investments
If your debts are under control and you’ve got savings in place, investing your refund could help it grow. Stocks, bonds, ETFs or even crypto (if you’re comfortable with risk) are all options.
👉 New to crypto? Here’s what Canadian business owners need to know.
Invest in your skills
Put that refund towards a course, workshop or professional certification. Upping your skills can help you grow your business, raise your rates or even pivot to new opportunities.
👉 Need ideas? Here are some great entrepreneur courses and classes.
Invest in your kids’ education
Registered Education Savings Plans (RESPs) are one of the best ways to save for your child’s post-secondary costs — especially with the government matching 20% of your contributions, up to a limit. The earlier you start, the more that money grows.
Prioritize your health
Your health is your most important business asset. Use your refund for a gym membership, massage therapy wellness retreat — or even equipment that helps you feel better and work smarter.
👉 A health spending account (HSA) can be beneficial for small business owners.
Reinvest in your business
Your tax refund could be just the boost your business needs. Whether it’s upgrading your workspace with new equipment, a small reno or energy-efficient improvements — or putting it toward growth like marketing, inventory or a new product line — a smart reinvestment can improve how you work and help you scale. Every dollar you put back into your business is a step toward the next level.
Protect yourself with insurance
Running a business means thinking ahead — and that includes protecting your income and your family. If you don’t already have coverage, consider using your tax refund to set up disability insurance, critical illness insurance or life insurance. It’s one of those things you hope you never need, but if life throws a curveball, you’ll be glad you planned for it.
Give back to a cause
Support a local charity or cause that matters to you. It feels good — and, bonus, it’s often tax-deductible. Just make sure it’s a registered Canadian charity to get the deduction.
👉 Learn how to donate responsibly.
Tax refunds are a great chance to get ahead. Whether you use yours to pay down debt, invest in your future or grow your business, make it count.
Need help making a plan? Our Chartered Professional Accountants can walk you through all things tax: deductions, write-offs, returns, GST — the whole works.
👉 Read more about personal tax.
📞 Or book a call — we’re here to help you feel good about your money.
