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CRA quarterly payments
July 31, 2018
3:00 am
Kidd
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Months ago, i received a notice from the cra, it said that i would be expected to make a donation on August 15th 2018. I have not received a notice stating how much they want. Has anyone received their Fall quarterly bill from the cra?

There was a thread here about the cra now making phone calls, apparently the price of government stamps was becoming too expensive for them. So, i stopped answering my phone.

Ignorance is bliss. My ignorance amuses me.

July 31, 2018
4:30 am
Bill
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July 31, 2018
12:21 pm
toto
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I always wonder if I need to make tax installments. I'm over the threshold every year, I just pay it lump sum when I do my taxes every year. I've never had a letter, do you have to determine it on your own if you should make installments?

July 31, 2018
12:32 pm
Bill
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toto, in theory you're supposed to know if you need to make instalments and do it yourself, at least the first time, but if they haven't bothered you and you're not being charged interest by CRA then I guess you've got an exemption! I've had some years with a similar experience as yours, maybe they only get after you after some consecutive years of having to make instalments and the amount is big enough, I don't know. I'm one of those rare people who just transfers money into my CRA account on a random basis so that I come out about even at tax time, and they seem to be ok with that too.

July 31, 2018
9:13 pm
toto
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Thanks Bill!
Probably a good idea that I remit once in a while like you do, then it's not a big amount all at once. The only reason I can think that they aren't bugging me to make installments is that I do pay it immediately after filing my taxes.

July 31, 2018
9:44 pm
Norman1
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One is considered late if one pays in full on filing when one was required to pay by installments.

Are you sure you are over the threshold?

The threshold is on balance owing (line 485) and not total payable (line 435).

Could have total payable of $10,000 each year. No installments required if $9,000 was withheld throughout the year and the balance owing is just $1,000 each year.

July 31, 2018
10:06 pm
AltaRed
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Technically if one does not get a notice to pay installments, none are required. Generally speaking, CRA sends a letter* at approximately end of July to mid-August advising how much is due on Sept 15 and Dec 15. A further letter comes in February saying how much is due Mar 15 and June 15. I have been getting these like clockwork for a very long time.

* That is, until I signed up for online notices a few years ago. Now everything comes into MyAccount mailbox where I log on and retrieve it. I do everything possible to avoid Canada Post snail mail.

Added: The threshold for installment taxes is when amount owing the previous tax year exceeds $3000.

August 1, 2018
2:07 am
Loonie
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If you make voluntary payments during the year, you can avoid the notices, provided you pay enough, as others have suggested.
If, by planning ahead in Nov/Dec, you ensure that the amount owing next April is under $3000, then they won't be asking you for installments.
If you keep amount owing under 3000, you can keep that 3000 invested longer.
If you save up your voluntary payments until December, you can keep those invested longer too. Those who are taking out lump sums from RSP/RIFs will know by Nov/Dec how much they are taking out and can use that to pay the voluntary amount.
The longer you can keep your money invested, the more you have! By keeping an eye on what you actually owe, you can keep your voluntary payments below what you will owe in April, so you can hang on to your money longer - or at least 3000 of it.sf-smile

Or you can just wait until they find you and do as you're told if this seems like too much bother.

I compare it to choosing equal monthly payments on my gas bill to even out high winter bills versus paying what I actually owe each month. I used to be on the equal payment plan, but discovered that I was overpaying more often than underpaying (although it would be reconciled later), so I switched back to paying for what I actually use. The gas company didn't like it when I did this and weren't sure if they would "allow" me, but they had no good reason not to as my credit was good. Any time they object, I figure I must be doing something right.

August 2, 2018
11:46 am
AltaRed
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That works for some. My investment income is quite variable, both in types and amounts, and complicated enough that I don't even dream of trying to figure out what voluntary payments might be to avoid installment payments. Whatever works best for everyone.

August 2, 2018
12:45 pm
toto
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I looked for a notice on my CRA account that would require me to make installments, and there wasn't one, so I called and they said if you don't get a notification in the mail to remit that you don't have to. I've been way over threshold for 3 years now.

August 2, 2018
3:24 pm
Loonie
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I think you're safe, toto, but I'm not an expert. My understanding is that you are only obligated if they require a payment from you - at least on this particular question.
Make sure they have your correct mailing address, since apparently it has to come in the mail?

August 2, 2018
6:14 pm
AltaRed
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The 'rule' I've read many times is to simply do what CRA asks and there are no consequences, e.g. if they should have sent an installment payment notice and did not do so. It can make for some whacky swings in the size of installment payments from year to year if there is 'one off' lumps of income, but that just comes with the territory.

August 2, 2018
6:19 pm
Bill
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Here's the link to the CRA page. This is their official, plain-English material and in typical 2018-style, it's unclear (at least to me):

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/making-payments-individuals/paying-your-income-tax-instalments/you-have-pay-tax-instalments.html

It says you DO have to make instalments if "both of the following apply". No reference to getting a notice, just if both conditions apply you MUST make instalments. Ok.

Then it says you MAY have to make instalments if you get an instalment reminder. They point out they send a reminder to those who MAY have to make instalments. (What about those who DO have to make instalments?)

Then they say if you received a reminder and you are required to make instalments (oh, ok, looks like SOME people who MUST make instalments will get a reminder) but don't do so, then there MAY (or may not, I guess) be interest and penalty.

Must be just me.

August 2, 2018
9:10 pm
toto
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I read that too. It sounded confusing to me too, that's why I ended up calling .
I hope the representative gave me the right info though.

August 2, 2018
10:08 pm
Loonie
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I think I may have to change my mind. Bill may be right.
The language certainly is confusing.
The page where they tell you how to calculate how much you should pay in installments (I guess this assumes you didn't get a "reminder") is another mess of gibberish:
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/making-payments-individuals/paying-your-income-tax-instalments/you-calculate-your-instalment-payments.html#clcltnptns

Note especially the "current year option". On this one, you will be penalized if you get it wrong and there does not seem to be any mechanism to verify if you've done it right, except getting penalized if you didn't!
i find the form they give you to calculate the installments to be quite bizarre, as there is really no calculating involved. You have to already know the tax owing before you fill it out! Then you divide by 4 (installments). If you use the third method and get it wrong, you can be penalized, but they aren't interested in seeing your calculations or knowing which method you chose!

It would be interesting to know if they ever go after anyone on this. I'd guess it's rare but who knows?

Perhaps someone (Bill?) can check the Income Tax Act and/or Regulations for more specifics. In my experience, government "information" websites are often oversimplified, leading to errors.

Interpreting government blurbs could be a great assignment for high school students or even post-secondary students in Communications Studies, no doubt with revealing results.sf-surprised

August 3, 2018
9:16 am
toto
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I actually just sent an email to CRA on this matter, so I could get it in writing to cover my butt in case they decide to charge me interest. I asked them to be crystal clear!!

August 3, 2018
11:10 am
Loonie
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Good luck, toto. Let us know how you make out.

August 3, 2018
4:55 pm
frizun
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When you do a voluntary payment,do you just do that through online banking with your SIN as the account number?
Is there any form or something to fill out first?..or can you just do it any time?

August 3, 2018
5:20 pm
Top It Up
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Correct - through online banking Bill Payment.

Look for something like this in Bill Payee set-up

CRA (REVENUE) - TAX INSTALMENT

enter your SIN, and you'll be good to go.

August 4, 2018
11:46 am
AltaRed
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The CRA gibberish online is mostly intended to provide a written precis of their processes and policy, not definitive interpretations of the ITA. Their IT bulletins were somewhat better but really cannot cover all the nuances that are possible.

Repeating what I said earlier, just follow what the CRA tells you to do with respect to installment payments.

If you don't get any such notice, there are no installment payments required and in all the material I've read online from blogs, etc. there are no consequences of interest or penalties. FWIW, the best way to ensure you are getting notices is to sign up for online receipt of said notices in an Inbox in MyAccount. I've long ago dismissed the use of Canada Post for anything and everything possible that can be sent or received online.

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