Manage Instalments: Avoid a Balance
Owing of More than $3,000
Avoid owing more than $3,000 at your balance due date.
Consider making your RRSP contribution, more charitable donations, splitting income between two tax years or with family members, deferring income to the future, or changing your income sources to “average down” the taxes you pay on your income overall. Filing as a tax savvy family helps, too.
When you owe the government more than $3,000 this year or in either of the preceding two tax years, you’ll fall into a “quarterly instalment remittance” profile.
That means you will be required to prepay your income taxes for next year starting on September 15, December 15, March 15, and June 15.
(Farmers pay once on December 31.) This can cause significant financial hardship, especially if you just finished paying more than $3,000 on April 30 or June 15. A few tax planning secrets and strategies can help you increase your cash flow. See your tax pro.