Weekly Tax Tips
Review Your Personal Tax Instalment Obligations
11 Feb 2009
If your total tax liability, less the portion that was withheld at source, is greater than $3,000 for both the current year and either of the two preceding years, you are required to make instalments for the current year. In Québec where provincial tax is collected by the province, the threshold is $1,800 for both federal and Québec tax. However, when paying instalments, it is possible to base your 2009 income tax instalments on an estimate of what your final tax obligation will be for 2009. If the estimate is correct and you pay ¼ of the estimate on or before the 15th day of March, June, September and December, no instalment interest will be charged. It is important to keep in mind that if you pay less than the instalments that the Canada Revenue Agency requires and your final tax obligation is higher than your estimate, instalment interest and penalties can arise.
For more information on paying personal tax instalments, read our Fast Facts 09-01 - Failure To Pay Tax Instalments Can Be Costly.
This tax tip is a publication of BDO Dunwoody LLP on developments in the area of taxation. This material is general in nature and should not be relied upon to replace the requirement for specific professional advice. The information in this tax tip is current as of 11 Feb 2009.
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