Ch2: Procedures And Administration

Question 1

What are instalments?

Answer 1

Sending money to the government for tax (4 times per year)
April 30 of the following year for regular income.
June 15 of the following year for business income.
Timing:
- March 15
- June 15
- September 15
- December 15

Question 2

When are instalments required?

Answer 2

• Net tax owing (federal + provincial - amounts withheld)
• Instalments required when: Net tax owing > $3,000 in 2020 and in either 2019 or 2018.

Question 3

How to calculate instalment amounts?

Answer 3

3 methods:
1) estimated net tax owing current year / 4
2) net tax owing preceding year / 4
3) CRA approach:
- Q1 & Q2: Net tax owing second preceding year / 4
- Q3 & Q4: (Net tax owing preceding year - payments 1 & 2) / 2

Question 4

When and why is the CRA instalment reminder approach best?

Answer 4

When it is the same total as preceding year approach.
Why? Some deferral of payment.