What are they?

CRA tax installments are periodic payments made to cover your income tax obligations throughout the year. These installments are usually required if you owe more than $3,000 for 2 previous years in taxes on income that doesn't have tax withheld, such as self-employment income, rental income, investment income, or certain pension payments.

When Do You Pay CRA Tax Installments?

The CRA typically sends installment reminders if you need to pay. Here are the key points:

Installment Due Dates:

• Installments are usually paid quarterly, with due dates on March 15, June 15, September 15, and December 15 each year.
• If a due date falls on a weekend or holiday, the payment is due the next business day.

How Much to Pay:

• The CRA provides an installment payment schedule based on your tax return from previous years.
• You can also calculate your own installment payments if you expect your income to be significantly different from the previous year.

How to Pay:

• Payments can be made online through your bank, by mail, or through pre-authorized debit.
• You can also pay through CRA My Payment, which allows direct payment using Interac or credit card.

Penalties:

• If you don’t make your installment payments on time, the CRA may charge interest on the unpaid amounts. Additionally, if you underpay, you could also face penalties.

Paying your taxes through installments helps manage your cash flow throughout the year and avoids a large tax bill when you file your tax return.

I have to pay installments so I understand the pain, but it is easier than coming up with a large tax payment in April. You can look at it this way – if you were an employee you’d be paying tax monthly to CRA, so it is similar.

Source: www.canada .ca