Who Needs to Pay Personal Tax Installments?
You need to pay personal tax instalments if your net tax owing is more than $3,000 for the current year and more than $3,000 in either of the two preceding years. CRA sends a notice if you are required to make installment payments.
How Are Installments Calculated?
The calculation for installment amounts is based on either your previous year’s tax liability or your estimated net tax for the current year.
When Are Installments Due?
Typically, installment payments are due on March 15, June 15, September 15, and December 15.
When a due date falls on a Saturday, a Sunday, or a public holiday recognized by the CRA, the CRA considers your payment to be paid on time if it is received on the next business day.
If your instalment payments are late or insufficient, you may have to pay instalment interest and penalty charges.
Penalty
You may have to pay a penalty if your instalment payments are late or less than the required amount, and late or underpayment related interest charges are more than $1,000.
Benefits of Professional Help
A tax professional can help you identify deductions and credits you may qualify for, potentially reducing your overall tax liability. They can help you calculate accurate installments, avoid common pitfalls, and stay on top of deadlines.
Trimount CPA is an accounting firm providing a range of accounting and tax services, please Contact Us for a free consultation.