Tax Installment Series: How do you calculate your tax installment payment?

personal income tax vancouver, income tax services vancouver, income tax company vancouver, how to file income tax in vancouver, file income tax vancouver, business tax services vancouver, business tax return tax preparation vancouver, tax preparation company Vancouver, tax preparation services vancouver bc, e tax filing income tax return vancouver, T1 General 2016, T1 General 2016 Vancouver, tax slips, income tax slips, tax information, T4, T5, T3, missing tax slips, late tax filing, tax deadline, debt, tax debt, pay CRA, paying the CRA, tax filing options, Homeroom E-return, tax appointment, dropping off taxes, health, wellness, tax installments, installment payments, tax instalments

 

Tax installments got you scratching your brain?

Thanks to our tax installment blog series, you know that tax installment are pre-payments made on certain dates to avoid paying a large tax bill in a lump sum on April 30th and to consider your net tax owing when paying by tax installments

This week, we keep the tax installment party going by answering two important questions:  how to calculate your installment payment and when do you have to pay your 2017 installments?

 

How do you calculate your installment payment?

Here are three ways to calculate your installment payments:

  • No-calculation option: Recommended for individuals whose income, deductions and credits stay about the same from year to year.
    • Canada Revenue Agency (CRA) will determine the amount of your installment based on your latest assessed tax return
    • CRA will send you a reminder
  • Prior-year option: This is the best option if your 2017 income, deductions and credits are similar to 2016 amount but WAY different from those in 2015.
  • Current-year option: This is the best option if your 2017 income, deductions and credits are SUPER different from 2016 and 2015.
    • You determine amount of your installment payments based on your estimated 2017 (current year) net tax owing, CPP contributions payable and EI premiums. Use the Calculation chart for installment payments for 2017 to calculate your total installment amount due.

 

Here’s an important tip from CRA:

When do you have to pay your 2017 installments?

If you are required to pay installments, the CRA needs to receive your 2017 installments BEFORE December 31, 2017. 

Here are suggested dates to pay your tax installments for 2017:

  • March 15
  • June 15
  • September 15
  • December 15

Whether you pay in a one lump sum or make monthly installments, as long as you pay your full installments before December 31, 2017 you will avoid installment interest. 

If you missed your March 15, not to worry. Just make sure you make it up before the end of the year.

If you are unsure if you have to pay installments, go here.

 

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *