If you owe more than $3,000 in taxes from the previous tax year, then you may be asked by the CRA to pay your next year’s taxes in installments. Employees typically do not need to worry about instalments because their employer will withhold tax throughout the year. However, individuals with more than one source of income may be required to pay installments. Since installments are based on the previous year’s income, a one-time event that causes a spike can trigger an installment notice. If you’re unsure, check with a certified accountant to help you through the process.

Key Takeaways:

• Installments are required when your net tax owing income is greater than $3,000 for the previous tax year.
• The letter the CRA sends in February 2019 is based on your 2017 income and outlines the required payments on, or before, March 15 and June 15. The August letter is based on your actual 2018 net tax owing and outlines the required payments on, or before, Sept. 15 and Dec. 15.
• If installments are late or less than the requested amount, taxpayers may have to pay interest and penalty charges, which cannot be deducted on their tax return.

“Twice a year, Canada Revenue Agency sends out instalment reminder letters to those taxpayers who are required to make payments.”

Read more: https://www.timescolonist.com/business/kevin-greenard-do-you-need-to-make-income-tax-instalment-payments-1.23658368