Tax Payments…UGG!

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Tax TimeThis question comes up ALL the time. How do I pay my taxes? Where do I pay my taxes? When are my taxes due?

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.Tax Debts

So what do you do if you owe taxes? How, where and when? This includes taxes for both individuals and businesses.

Personal Tax

Many options to choose from:

  1. Online Banking
    • Login to your bank
    • Add a payee (if not setup already). Usually listed under 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.
    • Remember your account number is your Social Insurance Number. Always double check for typos.
  2. Direct through CRA
    • Debit Card – Interac Online is now available. Login to your CRA My Payment service and pay with your debit card. Check to see if your bank and/or credit union is participating in this program. Don’t wait until the deadline just in case.
    • Visa Debit – Only select banks are offering this service. Scotiabank, RBC Royal Bank, TD Canada Trust & CIBC were the only ones participating at the time of writing this.
  3. Pre-Authorized Debit
    • Using CRA`s My Account, you can set it up so CRA takes a predetermined amount from your bank account to pay tax on one or more dates. Great for those required to make quarterly instalments.
  4. Third-Party Service Providers (and some even accept credit cards)
  5. At your Bank
  6. Mail a Cheque (Choose the tax centre closest to you)
    • Remember to include your SIN and tax year for which payment is for.

Business Taxes: GST, Payroll & Corporate

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Even more options to choose from:

  1. Online Banking
    • Login to your bank
    • Add a payee (if not setup already). Your bank may include business taxes under it’s own section in the bill payment area called Pay Business Taxes. There should 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 need to use the option pay an amount owing or pay interim amounts if paying for the following year.
      • Corporate Tax might only have one option however once you select the account, there will be additional questions; i.e. what is the year end date (company year end) for the payment you are making – is it for past, current or future payments.
      • 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.
    • Remember your account number is your Business Number including the RC0001, RP0001 and RT0001. Always double check for typos.
    • 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 – Interac Online is now available. Login to your CRA My Payment service and pay with your debit card. Check to see if your bank and/or credit union is participating in this program. Don’t wait until the deadline just in case.
    • Visa Debit – Only select banks are offering this service. Scotiabank, RBC Royal Bank, TD Canada Trust & CIBC were the only ones participating at the time of writing this.
  3. Pre-Authorized Debit
    • Using CRA’s My Business Account, you can set it up so CRA takes a predetermined amount from your bank account to pay tax on one or more dates. Great for those required to make quarterly instalments.
  4. Third-Party Service Providers (and some even accept credit cards)
  5. At your Bank
  6. Mail a Cheque (Choose the tax centre closest to you)
    • Remember to include your business number, tax account (GST, Payroll or Corp) and tax year for which payment is for.

Tax Due Dates

  • Personal Taxes are ALWAYS due April 30 unless it falls on a weekend, in which it is due the first Monday following.Personal Taxes
  • Corporate Taxes are generally due 3 months after your fiscal year end. There are some corporations who are due 2 months after.
  • GST payments are due based on how often you are required to file your return.
    • If you file quarterly, they are due the last day of the month following the quarter. Quarter ends May 31, they are due June 30.
    • If you file annually, they are due the last day of the third month following the quarter. i.e. Year ends January 31, they are due April 30.
  • Payroll and Source Deductions are generally paid monthly however some small businesses have the option to pay quarterly (approval required). 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 payments made for the current tax year that you are in and when your taxes are more than $3,000.
    • GST intstalments are due 30 days following each quarter. i.e. Year ends September 30, your GST instalments are due October 31, January 31, April 30 and July 31.
    • Corporate instalments are due at the end of each month. Some corporations have the option to pay quarterly.
    • Personal instalments are due March 15, June 15, September 15 and December 15.

Although I said we all have to pay tax, I didn’t say, you should pay more than you are supposed to. ;PTaxes

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. #askacpa

Remember to always seek the advice of a Professional CPA.

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