Tax Payments…UGG!

How do I pay my taxes? Where do I pay my taxes? When are my taxes due? These questions come up ALL the time. I know, no one likes to pay taxes (including me) however they are a necessary evil for all Canadians to benefit from the beautiful place we call home.

So, what do you do if you owe taxes? How and where do you pay? And when are they do?

How And Where To Pay Taxes

In an effort to make it easier on individuals and businesses, there are many options to choose from.

1. ONLINE BANKING
   • Individuals
     1. Once logged in to your bank, add a payee (if not setup already). The payee is usually listed as CRA current year, CRA tax amount owing, or CRA tax instalment. The one you choose will be based on whether your taxes are late, current, or for future payments.
     2. Remember your account number is your Social Insurance Number and always double check for typos.
   • Business Taxes (GST/Payroll & Corporate Tax)
     1. Once logged in to your bank, add a payee (if not setup already). Your bank may include business taxes under its own section in the bill payment area called Pay Business Taxes. There should also be a list to choose from based on what type of tax you are paying.
     GST will have the option to file and remit, pay an amount owing and pay interim amounts.
     • Option to file and remit will likely only be used if you are preparing and filing your own GST return. In our office, we prepare and file for our clients so you would only use the option pay an amount owing or pay interim amounts when paying instalments for the following year.
     Corporate Tax will have two options and for both you will need to indicate what tax year they are for which is your company year-end.
     • Balance Due is for what has been filed (or rather the tax year that you company just completed).
     • Tax Payments is for instalment payments for the following tax year (or rather the tax year your company is currently in).
     Payroll and Source Deductions will only have one option. Remember you will need to know what month or period you are making the payment for, how much your gross wages were, and how many employees you had for that month or period.
     2. Remember your account number is your Business Number including the RC0001, RP0001 and RT0001 and always double check for typos.
     3. Be careful what you choose for month, year, or period end dates. These dates are used to determine interest and penalties. If unsure, ask your CPA.
2. DIRECT THROUGH CRA
   • Debit Card – Login to your CRA My Payment (or CRA My Business Account for GST, Payroll & Corporate Tax) and pay with your debit card.
   • Visa Debit – Only select banks are offering this service including ATB Financial, Scotiabank, RBC Royal Bank, TD Canada Trust, BMO, Servus Credit Union and CIBC.
3. PRE-AUTHORIZED DEBIT - Using your CRA My Account (or CRA My Business Account for GST, Payroll & Corporate Tax), you can set it up so CRA takes a predetermined amount from your bank account to pay tax on one or more dates. Also great for those required to make quarterly instalments.
4. THIRD-PARTY SERVICE PROVIDERS (and some even accept credit cards)
5. CANADA POST – you will need a customized QR code and services fees will apply.
6. AT YOUR BANK - Who really goes to their bank anymore?!?! Remember, if you go to the bank, you will need your pre-printed remittance voucher from CRA which can be downloaded from your MyAccount or MyBusinessAccount but if you have access to that, you might as well use option 2 above.
7. MAIL A CHEQUE – Does anyone use snail mail anymore?! Choose the tax centre closest to you and remember to include your SIN (or business number) and tax year for which payment is for.

Tax Due Dates

Tax payment due dates can be quite confusing as there can be many depending on the type of tax you are paying and whether for the past or current year.

• PERSONAL TAXES (individuals) are ALWAYS due April 30 unless it falls on a weekend, in which case it is due the first business day following which is usually the Monday.
• CORPORATE TAXES are generally due 3 months after your fiscal year end although there are some corporations that are due 2 months after. i.e. Tax year ends January 31, your corporate taxes are due April 30.
• GST payments are due based on how often you are required to file your return.
  1. If you file quarterly, they are due the last day of the month following the quarter. i.e. Tax quarter ends May 31, GST is due June 30.
  2. If you file annually, they are due the last day of the third month following the quarter. i.e. Tax year ends January 31, GST is due April 30.
• PAYROLL AND SOURCE DEDUCTIONS are generally paid monthly however some small businesses have the option to pay quarterly (CRA will advise annually if eligible which includes always filing on time and when the withholdings are less than $1,000/month). For monthly payments, they are due the 15th of the month following your payroll. i.e. Payroll for March would be due April 15.
• INSTALMENTS are tax payments made in advance of the tax due date when your prior year taxes (individuals, GST, and Corporate Tax) are more than $3,000. 5 W’S Of Tax Instalments has more details on that for you.

Although I said we all must pay tax, I didn’t say, you should pay more than you are supposed to. Take advantage of every credit, deduction and benefit you are entitled to. The government puts them in place for a reason so don’t pay more than you should.

And remember, always seek the advice of a Professional CPA.

***This blog is for information only and not to be used as tax advice or planning without first seeking professional advice. Information is subject to change without notice.