# Instalment taxes and reminders



## james4beach (Nov 15, 2012)

I did not pay instalments in past years, and I have not received any instalment notice from CRA.

My 2020 taxes were the first time I had to pay a large balance owing, more than the $3000 threshold described on this CRA page. This web page says you have to pay instalments in 2021 (meaning the first one is due next month) if *both* of these are true

your 2019 or 2020 net tax owing exceeded $3000 - yes mine did
your 2021 net tax owing exceeds $3000 - I don't know! Maybe?
I have unpredictable self-employment income, but I would guess that my 2021 tax owing will exceed $3000. Does this mean I should start paying instalments now, even though I haven't seen a notice from CRA?

And what happens if I don't pay instalments? Am I only required to pay them if CRA sends me a reminder/notice?


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## Ponderling (Mar 1, 2013)

You get the notice. If your situation points that tax will be due you pay the installment. No gun to head if you don't, just risk of interest on if taxes were due, i think. Really it is CRA smoothing so you dont get stuck with a lump to pay at tax time and no means to do so.


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## pwm (Jan 19, 2012)

Installment reminders arrive in February showing your March and June number owing, and again in August which shows the September and December numbers. Based on your situation you will receive a reminder in August around the middle of the month. No need to do anything before that. Your first installment payment will be September 15 2021. 

You are correct in that if you owe over $3000 in any 2 of the last 3 years you go on installments, however that means you could be over, then under for 2 years, then over again and under for another 2 etc. and never be subject to installments, if that makes sense. That might happen to you if your income is variable. Put another way, if you are under for 2 years running you will go off installments.


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## james4beach (Nov 15, 2012)

pwm said:


> Based on your situation you will receive a reminder in August around the middle of the month. No need to do anything before that. Your first installment payment will be September 15 2021.


Interesting, thanks! But is there any penalty or interest if I wait until I see a CRA notice (and start installments in September)? That would mean that I only make two installment payments this year, instead of all four.

It would also pretty much guarantee that I'm paying installments that are much lower than my eventual 2021 tax bill.


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## doctrine (Sep 30, 2011)

You don't have to pay installments, but if your taxes owing in 2021 end up exceeding $3000, you will be on the hook for interest payments for the year. I was annoyed when I first got these for similar reasons as you, but that was 10 years ago and I am over it. I typically pay $3-6k in installments per year. If I have a lot of capital losses, I can typically get that back but more often than not I will have a tax bill due to Canadian dividend payments primarily, which are not taxed at source.


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## pwm (Jan 19, 2012)

Since CRA won't know about your 2021 income until April 2022, you will also receive a reminder in February 2022 for March and June 2022 based on what they know from today. After they see your 2021 income, they adjust the amounts in August. You won't get any penalty if you just pay the reminder amounts. 

There are two other choices regarding the amounts you pay. This is cut from my last reminder:

_1. No-calculation option - Pay the amounts shown in box 2 of all the instalment reminders we will send you in 2021. - Each amount in box 2 above is equal to one quarter of your 2019 net tax owing and one quarter of any EI premiums payable. 
2. Prior-year option Pay one quarter of the total of your 2020 net tax owing and one quarter of any EI premiums payable on each due date. 
3. Current-year option Pay one quarter of the total of your estimated 2021 net tax owing and one quarter of any EI premiums payable on each due date. You do not have to tell us which option you choose, even if, according to that option, you are not required to make payments_

I would recommend you just pay the reminder amount and not try to be creative. I tried paying an amount different than the reminder amount once and ended up being charged a small penalty because my calculations were off.


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## like_to_retire (Oct 9, 2016)

If you get a notice in August, then the Sep and Dec payment requests will be large enough to cover what CRA feels is required. Pay it and there will be no penalty.

ltr


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## AltaRed (Jun 8, 2009)

As Pwm already said, the trigger is if you had more than $3000 owing in 2 of the last 3 years. If it is only 2020 that was over $3000, I'd bet CRA will not request installment payments, nor do you need too, nor would any interest be due next year. You will find out in August. 

You have no certainty today that 2021 will be over $3000 until next April so there is no way to pay installment payments this year. If you do owe over $3000 next April, then you will start getting installment payment notices Aug 2022 for Sept 2022 and Dec 2022 payments. I disagree with Doctrine's belief you will be charged interest. I am of the belief you are not charged interest if you have not been asked to make installment payments.


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## ian (Jun 18, 2016)

My understanding is no interest charge IF you have not been requested to make installment payments. 

We both have to make installment payments. Not a biggie. We took the on line option-no snail mail. We simply check the CRA accounts to see when the installment is due and how much is due. From our perspective less mail is better.

It is a very straightforward process. No mystery there.


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## AltaRed (Jun 8, 2009)

Not only do I get all my reminders via CRA MyAccount online Inbox but with PAD, CRA automatically debits my bank account when the installment payment is due. I am not going to anything other than the "no calculation" option anyway. Both over payments and under payments are self-correcting on an annual (July to June) basis eventually.


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## james4beach (Nov 15, 2012)

pwm said:


> I would recommend you just pay the reminder amount and not try to be creative. I tried paying an amount different than the reminder amount once and ended up being charged a small penalty because my calculations were off.





like_to_retire said:


> If you get a notice in August, then the Sep and Dec payment requests will be large enough to cover what CRA feels is required. Pay it and there will be no penalty.





AltaRed said:


> As Pwm already said, the trigger is if you had more than $3000 owing in 2 of the last 3 years. If it is only 2020 that was over $3000, I'd bet CRA will not request installment payments, nor do you need too, nor would any interest be due next year. You will find out in August.


Very interesting, thanks everyone! Yes it seems like I really should wait to hear what they say in August. The problem with preemptively paying (getting creative as @pwm says) is that I don't even know how much to pay, and it may result in a mismatch if I try to get "too smart".

I will wait to see what they say. In addition to a letter, I presume that any installment expectations would become clear when I look under CRA my account?


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## AltaRed (Jun 8, 2009)

james4beach said:


> I will wait to see what they say. In addition to a letter, I presume that any installment expectations would become clear when I look under CRA my account?


It will be posted on CRA MyAccount the same time it is sent to you, either electronically to your MyAccount email Inbox (with a notification to you in your normal email) or by paper (however your relationship with CRA is established). There is nothing else in CRA MyAccount that will tell you until then.


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## james4beach (Nov 15, 2012)

AltaRed said:


> It will be posted on CRA MyAccount the same time it is sent to you, either electronically to your MyAccount email Inbox (with a notification to you in your normal email) or by paper (however your relationship with CRA is established). There is nothing else in CRA MyAccount that will tell you until then.


Thanks. Yes, currently I just see $0 account balance and $0 under installments.

My recent tax filings were an absolute **** show. The most complicated returns I've ever had in both the US & Canada (with help from a CPA). I'm trying to wind down all my American stuff, taking a 401(k) out of the US. If anyone is looking for a sharp CPA & CA in Manitoba with expert knowledge of dual country taxes, shoot me a message. They're not cheap, and I'm a very frugal guy, but they are absolutely worth it (plus helped with my small business taxes).


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## afulldeck (Mar 28, 2012)

I absolutely hate installments. These should be made illegal. Pay taxes once a year ought to be the process.


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## AltaRed (Jun 8, 2009)

afulldeck said:


> I absolutely hate installments. These should be made illegal. Pay taxes once a year ought to be the process.


We welcome you taking on the Department of Finance and CRA. Please let us know when you succeed (or not). I personally don't care. I've been paying installments for at least 20 years. It is not a big deal. Just send them what they tell you to send.


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## ian (Jun 18, 2016)

You do NOT have to pay the installments.

However, interest will be added to any outstanding installment amounts that you do not pay on the installment payment due date. I can well understand why the Government wants installments. Not just for the time value of money but also from a collections perspective.


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## james4beach (Nov 15, 2012)

ian said:


> You do NOT have to pay the installments.
> 
> However, interest will be added to any outstanding installment amounts that you do not pay on the installment payment due date


When you say this (about the interest for installments not paid when due), are you only referring to installments that are demanded as per CRA instructions? Is there only interest if CRA has decided, and *tells* me, that they want installments?


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## afulldeck (Mar 28, 2012)

AltaRed said:


> We welcome you taking on the Department of Finance and CRA. Please let us know when you succeed (or not). I personally don't care. I've been paying installments for at least 20 years. It is not a big deal. Just send them what they tell you to send.





AltaRed said:


> We welcome you taking on the Department of Finance and CRA. Please let us know when you succeed (or not). I personally don't care. I've been paying installments for at least 20 years. It is not a big deal. Just send them what they tell you to send.


Perhaps you should care. There is a principle of 'fairness" at play. Should you pay HST on goods you didn't buy-yet? Of course not. Why pay income tax on income you didn't receive? Just because the government "thinks" we should? If one receives income only on June 21--then and only then, should taxes be paid. 

Better yet, fix the whole problem, make everyone pay all income taxes only once ---at the end of April. Writing one big check will 


make people think "are we getting the services we need for this dough?" 
Force people to grow up and learn to handle money
Force the government to better plan and budget for the year

Of course the GoC wouldn't like that, since they've never could budget properly and the last thing they want is the population scrutinizing where their money is going..


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## AltaRed (Jun 8, 2009)

Oh but you have already earned that income and have been putting that to work either via spend, or into investments. The Dept of Finance is asking you to pay 25% of the likely taxes owed every quarter. The March installment is on estimted income earned to Mar 15th, the June installment on estimated incremental income earned since Mar 15th, etc. If they really wanted to get pedantic about it, they could ask for monthly payments at the end of each month.


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## afulldeck (Mar 28, 2012)

AltaRed said:


> Oh but you have already earned that income and have been putting that to work either via spend, or into investments. The Dept of Finance is asking you to pay 25% of the likely taxes owed every quarter. The March installment is on estimted income earned to Mar 15th, the June installment on estimated incremental income earned since Mar 15th, etc. If they really wanted to get pedantic about it, they could ask for monthly payments at the end of each month.


What are you talking about? An estimate is just that a "possible" hypothetical. You may not have earned anything. If you withdraw once every 5 year...then its once every 5 years. To be clear--you've already payed taxes on investments...


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## P_I (Dec 2, 2011)

Quarterly instalment payments are the quasi-equivalent of the required payroll deductions that employers withhold from paycheques. Because everyone's tax situation and available deductions are unknown until tax filing time, they are at best an estimate. 

Contrary to popular viewpoints that getting a tax refund is desired, every taxpayer should try to arrange their affairs such that when filing their tax return there is a small balance owing. No need to give the government an interest free loan, which is what you're doing if you are getting a refund each year.


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## afulldeck (Mar 28, 2012)

P_I said:


> Quarterly instalment payments are the quasi-equivalent of the required payroll deductions that employers withhold from paycheques. Because everyone's tax situation and available deductions are unknown until tax filing time, they are at best an estimate.
> 
> Contrary to popular viewpoints that getting a tax refund is desired, every taxpayer should try to arrange their affairs such that when filing their tax return there is a small balance owing. No need to give the government an interest free loan, which is what you're doing if you are getting a refund each year.


Agreed. This is why I don't like installments or withhold tax --- the biggest devil of them all. Now I get it that the government wants this, but I don't think withholding from paycheques is right either. If I could have tax law re-written, you would pay once a year only, regardless of income. Being force to write that big check once a year is the only way I can see to get people invested in democracy, civic duty and to seriously consider where their hard earned dollars are going....


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## AltaRed (Jun 8, 2009)

afulldeck said:


> What are you talking about? An estimate is just that a "possible" hypothetical. You may not have earned anything. If you withdraw once every 5 year...then its once every 5 years. To be clear--you've already payed taxes on investments...


I earn income every month. My CPP, DB pension and investment income per my investment account statements. I spend it every month too. I am okay with paying tax on all that every quarter. This 'issue' is about 102nd on my list of 80 priorities.....


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## afulldeck (Mar 28, 2012)

AltaRed said:


> I earn income every month. My CPP, DB pension and investment income per my investment account statements. I spend it every month too. I am okay with paying tax on all that every quarter. This 'issue' is about 102nd on my list of 80 priorities.....


And I don't...so? 

My point is about getting the population writ large to get involve in these types of Government policies....such that they are not walked over...


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## P_I (Dec 2, 2011)

afulldeck said:


> If I could have tax law re-written, you would pay once a year only, regardless of income.


Given the amount of credit card debt that exists in Canada, what percentage of the Canadian population do you think would properly set aside the necessary funds to met their annual tax obligation?

We are much better served making regular instalment or payroll deduction payments.


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## AltaRed (Jun 8, 2009)

People are not as dumb as you think they are. Those who pay most of the income tax are well aware of what the bottom lines are in their tax returns every year. Writing a single cheque each year would be more impactful for sure but I doubt it would change anyone's views on value received. They already know their tax burden.

As P_I suggests, most could not budget for a single payment anyway. There would be a lot of "first borns" up for sale every April......


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## gardner (Feb 13, 2014)

AltaRed said:


> most could not budget for a single payment anyway


My feeling is that this is likely true. A significant number of people would be unable to keep up with their tax obligations. This would result in defaults, judgements and garnishes -- back where we are now. Yeah, maybe 60% of folks would manage alright, but such a significant portion would fall behind that the overall approach would wind up to be at-source deduction anyway.


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## pwm (Jan 19, 2012)

_As P_I suggests, most could not budget for a single payment anyway. There would be a lot of "first borns" up for sale every April...... _

Good one AltaRed. 
In actual fact it would more likely be boats, quads, dirt bikes and snowmobiles up for sale every April


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## gardner (Feb 13, 2014)

james4beach said:


> When you say this (about the interest for installments not paid when due), are you only referring to installments that are demanded as per CRA instructions? Is there only interest if CRA has decided, and *tells* me, that they want installments?


Interest is calculated on tax owed but not paid by instalment. If they asked for $10K and you paid $7K but wound up owing $10K, the difference attracts interest. The interesting effect of instalments is that if you keep up, but _that_ amount is still below your tax owing, they _do not_ charge interest. Eg: if they ask for $10k and you paid on time, but wound up owing $13K and pay that on time, there is no interest. If they never asked for instalments at all, you're in the clear.

In theory, you are obligated to continuously keep track of your tax obligations and pay as you go via instalments. The true amount might be less or more than the demanded amount, or even nothing -- it is your responsibility to keep up. The demanded instalment amount is just a sort of "no foul" amount, guarantied to stay clear of interest or fines.


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## ian (Jun 18, 2016)

When I was working I had tax deducted and remitted every two weeks. Now that I am retired I still have tax deducted from my pension. But not enough. Nor does it account for my investment income that exceeds my pension. 

Is it fair that wage earners have to pony up each payroll date when, in the absence of installments, I could delay paying all tax attributable to the prior year by April 30 of the following year?

We have been paying tax installments of various amounts for years. It really is not such a big deal. Certainly nothing to get us wound around the axle about. We do not see anything unfair about it.


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## afulldeck (Mar 28, 2012)

gardner said:


> Interest is calculated on tax owed but not paid by instalment. If they asked for $10K and you paid $7K but wound up owing $10K, the difference attracts interest. The interesting effect of instalments is that if you keep up, but _that_ amount is still below your tax owing, they _do not_ charge interest. Eg: if they ask for $10k and you paid on time, but wound up owing $13K and pay that on time, there is no interest. If they never asked for instalments at all, you're in the clear.
> 
> In theory, you are obligated to continuously keep track of your tax obligations and pay as you go via instalments. The true amount might be less or more than the demanded amount, or even nothing -- it is your responsibility to keep up. The demanded instalment amount is just a sort of "no foul" amount, guarantied to stay clear of interest or fines.


What if you ignored all installments, then two weeks before you file your taxes you pay all that is due? Its before the tax deadline but after the installment deadline?


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## afulldeck (Mar 28, 2012)

P_I said:


> Given the amount of credit card debt that exists in Canada, what percentage of the Canadian population do you think would properly set aside the necessary funds to met their annual tax obligation?
> 
> We are much better served making regular instalment or payroll deduction payments.


Don't know, but CRA can fine them. Treating adults like kids isn't the right answer...


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## Retired Peasant (Apr 22, 2013)

James: if you receive an instalment notice, pay it - no interest. You do not need to pay anything, if they don't send a notice.


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## gardner (Feb 13, 2014)

afulldeck said:


> What if you ignored all installments, then two weeks before you file your taxes you pay all that is due? Its before the tax deadline but after the installment deadline?


When I did this, I got charged interest. In my case I did not ignore the instalment notice, but I under-paid the amount ultimately due (and the amount they asked for). I was charged interest on the difference.


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## james4beach (Nov 15, 2012)

Retired Peasant said:


> James: if you receive an instalment notice, pay it - no interest. *You do not need to pay anything, if they don't send a notice.*


Thanks. I have not (yet) received any instalment notice. It seems that I am not obligated to pay any, unless they tell me that they want them.

As soon as they send me a notice, I will of course start paying as instructed.


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## ian (Jun 18, 2016)

There has been the odd year where one of knew our income would be less so we reduced the amount of each installment we made. 

On occasion I have had an amount owing to me so I simply ticked the box and used the refund towards the following tax year installments.

This whole business of tax installments is not rocket science. It is very simply and straightforward. We pay because we have made the income. Moaning and groaning about it will not make it any better.


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## gardner (Feb 13, 2014)

Retired Peasant said:


> if you receive an instalment notice, pay it - no interest.


The difficult case is where the instalment request is unreasonably high. My wife, for reasons her financial planner (which isn't me) has never explained, crystalized colossal gains in 2017 for no sensible reason. This resulted in a really huge tax hit that year -- which we went ahead and paid. But the 2018 the instalment notice wanted really outrageous amounts again. We knew these were too much, but could not be 100% sure what the true amount should be. We wound up sawing off on a 100% over number, but not the 500% over number the instalment notice would have wanted.


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## AltaRed (Jun 8, 2009)

gardner said:


> The difficult case is where the instalment request is unreasonably high. My wife, for reasons her financial planner (which isn't me) has never explained, crystalized colossal gains in 2017 for no sensible reason. This resulted in a really huge tax hit that year -- which we went ahead and paid. But the 2018 the instalment notice wanted really outrageous amounts again. We knew these were too much, but could not be 100% sure what the true amount should be. We wound up sawing off on a 100% over number, but not the 500% over number the instalment notice would have wanted.


Clearly in situations like this, it is best to change methodology with a safety factor of course. I had to do the same some years ago after realizing a very large cap gain from a land sale the year before.


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## ian (Jun 18, 2016)

When we know that the requested installments are more than will be required we guestimate. We pay what we think should be the number. Then we square up at tax time. The worst that can happen is that CRA tacks on a little interest if our guestimate is low.


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## pwm (Jan 19, 2012)

One side effect of the penalty is that you need to create a new payee in your online banking for the penalty interest payment. I estimated wrong once and had to pay a small penalty so now I have a total of 5 payees in EasyWeb for CRA:

1). My payment on filing
2). My wife's payment on filing
3). My installment payment
4). My wife's installment payment
5). My penalty payment

Of course I could remove the penalty one, but I left it just in case. I always have to double check when I'm sending them money because they are all separate accounts at CRA and one needs to be paying attention.


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## james4beach (Nov 15, 2012)

A bit off topic, but wanted to check this with you guys.

I'm enrolled for Online Mail, and that's how I got my Notice of Assessment. No problem there.

But am I still supposed to see the NoA arrive by postal mail too? Did you get a paper copy?


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## pwm (Jan 19, 2012)

You will get an email from CRA saying you have online mail. The CRA mail item will be a message saying you have a new Installment Reminder. You can download a pdf which is a copy of the paper document which is what I do. I keep all my tax pdfs in new files each year on my PC. I don't receive a paper document in the mail any more. Maybe that was an option I chose at CRA. I can't remember if there was a choice to still get a paper copy.


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## like_to_retire (Oct 9, 2016)

james4beach said:


> I'm enrolled for Online Mail, and that's how I got my Notice of Assessment. No problem there.
> 
> But am I still supposed to see the NoA arrive by postal mail too? Did you get a paper copy?


As PWM says, you will now only get e-mails from CRA telling you there's mail for you. You have to log in to CRA and print the PDF if you want a paper copy.

ltr


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## OneSeat (Apr 15, 2020)

ian said:


> You do NOT have to pay the installments.
> 
> However, interest will be added to any outstanding installment amounts that you do not pay on the installment payment due date. I can well understand why the Government wants installments. Not just for the time value of money but also from a collections perspective.


Probably a past issue - but due to the various complications last year I never did receive the August Installments notification message either electronically or via mail. I eventually sent them the September amount in November and the December amount on time in December - using the same $$$ as in their February notification (for March and June which I had paid on time).

I was expecting a small interest charge for being late but added a "note" to the front of my Tax Return in March - sort of "It's all your fault but here's what I did to try to help out" (not my exact words!). Seemed to work - no reply, amount I sent was accepted, no interest charge.


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## james4beach (Nov 15, 2012)

pwm said:


> I keep all my tax pdfs in new files each year on my PC. I don't receive a paper document in the mail any more.


Thanks. I keep all the PDFs as well, but I just wasn't sure if there is still postal mail coming. I want to make sure I don't have any mail going missing.

I've had a few letters from the US sent to me, that have gone missing (never arrived). I also received a letter from the IRS that was open, completely unsealed. Maybe this is USPS and US border issue, but it made me anxious about whether I am receiving all my postal mail.


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## AltaRed (Jun 8, 2009)

I do not trust the postal system any more. It is not secure either given how mail goes astray, bags of mail get dumped in ditches, etc. Everything I can possibly do digitally, I do digitally.


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## OneSeat (Apr 15, 2020)

james4beach said:


> -------------------made me anxious about whether I am receiving all my postal mail---------------------





AltaRed said:


> ---------------I do not trust the postal system any more------------------------


I totally agree - I've been a digital convert for over 30 years. But after the fiasco CRA suffered (created?) last year and wouldn't even communicate to resolve it I had no choice but to revert to "paperwork" and couriers for the time being. All my stuff for 2020 tax is now finished (very efficiently) so I will probably "try again" later this year.


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## james4beach (Nov 15, 2012)

OneSeat said:


> I totally agree - I've been a digital convert for over 30 years. But after the fiasco CRA suffered (created?) last year and wouldn't even communicate to resolve it I had no choice but to revert to "paperwork" and couriers for the time being. All my stuff for 2020 tax is now finished (very efficiently) so I will probably "try again" later this year.


I've actually only had problems with the US Postal Service so far, and I don't remember ever having mail within Canada go missing.


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## OneSeat (Apr 15, 2020)

Lucky you!


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## afulldeck (Mar 28, 2012)

AltaRed said:


> I do not trust the postal system any more. It is not secure either given how mail goes astray, bags of mail get dumped in ditches, etc. Everything I can possibly do digitally, I do digitally.


And why would you trust digital, at least at its current instantiation with the GoC? Do you digitally sign all documents going to the GoC? 

That's not to say there wasn't a good opportunity to make digital work. Canada Post had a real opportunity to be the first to have a national, encrypted email mail service between the citizens of Canada and the GoC (over 15 years ago) and they thumb their noses at it. Much more work needs to be done before digital documents can be trusted.


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## AltaRed (Jun 8, 2009)

I trust Hypertext Transfer Protocol Secure (_HTTPS_) and that is good enough for me as a platform for to/from transfer of PDF documents to anyone.

Canada Post did have an opportunity to push ePost but the business model was not cost effective enough nor convenient enough and it is being discontinued effective end of 2022.


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## james4beach (Nov 15, 2012)

gardner said:


> Interest is calculated on tax owed but not paid by instalment. If they asked for $10K and you paid $7K but wound up owing $10K, the difference attracts interest. The interesting effect of instalments is that if you keep up, but _that_ amount is still below your tax owing, they _do not_ charge interest. Eg: if they ask for $10k and you paid on time, but wound up owing $13K and pay that on time, there is no interest. If they never asked for instalments at all, you're in the clear.
> 
> In theory, you are obligated to continuously keep track of your tax obligations and pay as you go via instalments. The true amount might be less or more than the demanded amount, or even nothing -- it is your responsibility to keep up. The demanded instalment amount is just a sort of "no foul" amount, guarantied to stay clear of interest or fines.


Thanks again. This is very interesting. Great news that keeping up with the instalments they ask, even if it ends up being less than tax owing, does not charge interest.

There was no wait time at the CRA this morning so I phoned, and the agent said that nothing is due at this time and they will very likely (basically guaranteed) send me an August instalment instruction. So I'll wait for August and then start paying instalments using the number they give me at that time.

I also understand perfectly clearly why the CRA wants instalments. Already I am seeing that I need to manage my business cashflow and make sure I keep enough liquidity for tax payments. This is making me think twice before I invest some excess cash... it's tough to manage this. Many people obviously will end up with insufficient liquidity and then fail to pay their taxes.


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## james4beach (Nov 15, 2012)

I checked again with CRA now that it's September, and they say that instalments aren't required on my account. So I guess I don't need to pay instalments for this year.

If anyone needs to phone the CRA for anything, there is zero wait time right now... seems like a quiet week for them.


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## AltaRed (Jun 8, 2009)

The notice for Sept and Dec came in about Aug 10th or so, just as the notice for Mar and June comes in about Feb 10th. If you don't get one, there are no installments owing.


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## ian (Jun 18, 2016)

No problem with installments. We prefer email to snail mail from CRA. 

At the start of our retirement ten years ago we had no fixed address for a year. We moved everything possible to email.

Best thing we ever did. We have a community mail box where we live. We only bother with it once a week, sometimes once every two weeks. Nothing but adverts that go straight to the recycle bin. They don't make it past the garage. Mail delivery three days a week would be fine with us.


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## AltaRed (Jun 8, 2009)

You can fix most of the bulk mail problem by putting a notice in your community box that says "No unaddressed mail please" and Canada Post won't leave unaddressed junk mail. We've done it for well over 10 years and it works! Except for junk mail that actually has something like "Occupant, Address" on it (a rare occurrence).

Edit: Error


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## Money172375 (Jun 29, 2018)

AltaRed said:


> You can fix most of the bulk mail problem by putting a notice in your community box that says "No addressed mail please" and Canada Post won't leave unaddressed junk mail. We've done it for well over 10 years and it works! Except for junk mail that actually has something like "Occupant, Address" on it (a rare occurrence).


“No UNaddressed mail”


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## AltaRed (Jun 8, 2009)

Ooooops! Corrected.


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## illions (Jul 27, 2021)

Does the CRA only ask for instalment payments if taxes on employment income exceed $3K or does it include cap gains too? i.e. If I sold enough stock to trigger over $3K tax in 2020, then again in 2021, will I be expected to pay by instalments in 2022?

Let's say I don't end up paying any instalments in 2022. If I'm even $1 in owing for the year, should I expect penalties on the $1?


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## kcowan (Jul 1, 2010)

Yes capital gains count as income. If they exceed over $3000 taxable then instalments are expected. Quarterly is just expected. If you miss by a month, e.g. you get the gain on December 20th, then a prepayment in December 21 is fine.


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## james4beach (Nov 15, 2012)

kcowan said:


> Yes capital gains count as income. If they exceed over $3000 taxable then instalments are expected. Quarterly is just expected. If you miss by a month, e.g. you get the gain on December 20th, then a prepayment in December 21 is fine.


Yeah I think cap gains count. But certain other things are excluded.

I was above $3000 due to self employment CPP and was expecting instalments, but it turns out the CPP amount does not qualify for that threshold


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## Zoombie (Jan 10, 2012)

Hi hopefully its OK to tack my question here instead of making new thread:

2020 tax year was first year I was over the 3000 owing so CRA sent installment reminders. First payments in September and December 2021 which made some sense to me. 
I just recieved reminders that in March and June 2022 I owe installments (each payment half as much as the Sept/Dec ones). I have not filed my 2021 taxes yet of course. 

I am confused as to whether these March/June amounts are meant to relate to the 2020 tax year or are these installments because they are assuming I will be over on 2021 tax year as well? Obviously I will have filed my 2021s by June so I dont really understand why they set an installment for then. 

Any help appreciated. I am planning to just pay the Mar/June installments now and then deduct that amount from what I would pay when I file my 2021s, but if it ends up being a refund I doubt CRA will give that money back.


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## cardhu (May 26, 2009)

Zoombie said:


> I am confused as to whether these March/June amounts are meant to relate to the 2020 tax year or are these installments because they are assuming I will be over on 2021 tax year as well?


The installment reminders are automated … once you trigger the system, which you did when you submitted your 2020 tax return in the spring of 2021, you’ll continue to receive installment reminders until you drop below the threshold again … since they haven't yet processed your 2021 tax return, they have no way of knowing at this time whether you did or didn't drop below the threshold. 

Once they receive your 2021 tax return, one of two things will happen ... if you have dropped back below the threshold, the Mar/Jun 22 reminder will be the last one you receive (until the next time you trigger the system) ... if you remain above the threshold, you'll be on a quarterly installment schedule until you drop below it again. 

The installments you're being asked to pay in Mar/Jun 22, of course, apply to your 2022 taxes ... if you are confident that you won’t owe as much as the reminder states, you are not required to pay that amount, *but* there is a risk (interest) if you’re wrong. Many people opt to simply pay the stated amount even if they think its too much, just to avoid that risk … others (like me) are comfortable paying less than the stated amount, where applicable. 

FWIW, I first crossed that threshold in 1996, and haven’t dropped below it since.


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## ian (Jun 18, 2016)

I always round our installments up to the next $100. We have been paying installments for years. There have been a few times when we have done our own estimate of installments. Usually when the CRA number was high and half way or 3/4 of the way through the tax year we realized that our liability would not be as large as CRA suggested. There is a formula but we have never used it. Just guessed.


Today we got locked out of DW's CRA account. All down to me. Called CRA. I was expecting that it would be an awful experience with lots of call time. 

It was the opposite. Got through the usual menu items. She waited about 30 seconds for the agent to pick up. He reset her account access after asking the usual 2020 ID questions. Have to say....excellent service, unexpected short answer time.


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## afulldeck (Mar 28, 2012)

ian said:


> I always round our installments up to the next $100. We have been paying installments for years. There have been a few times when we have done our own estimate of installments. Usually when the CRA number was high and half way or 3/4 of the way through the tax year we realized that our liability would not be as large as CRA suggested. There is a formula but we have never used it. Just guessed.


So this year I paid my installments through my banks CRA tax install account, then stupidly I also paid CRA 2021 Tax RT essentially overpaying my '21 taxes. So would you know if I could add the number together for my tax 21 return?


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## like_to_retire (Oct 9, 2016)

afulldeck said:


> So this year I paid my installments through my banks CRA tax install account, then stupidly I also paid CRA 2021 Tax RT essentially overpaying my '21 taxes. So would you know if I could add the number together for my tax 21 return?


The amount you claim on your 2021 tax return should match the amount on the CRA site. You'll find that amount shown on the Instalment Reminder on the CRA site under Mail.

ltr


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## afulldeck (Mar 28, 2012)

like_to_retire said:


> The amount you claim on your 2021 tax return should match the amount on the CRA site. You'll find that amount shown on the Instalment Reminder on the CRA site under Mail.
> 
> ltr


@ltr, thanks, but I realized that. I have paid installments and that number is known, but I also paid current year taxes (ie. what you might need to pay when you do owe taxes at the end of the year.) So the question is how to you account for the over payment? Presumably CRA takes witholding taxes and adds that to current year.


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## like_to_retire (Oct 9, 2016)

OK, I understand now. 

Yeah, I can't see how that can be resolved online, and so you may be sentenced to phoning CRA. 

ltr


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## kcowan2000 (Mar 24, 2020)

afulldeck said:


> @ltr, thanks, but I realized that. I have paid installments and that number is known, but I also paid current year taxes (ie. what you might need to pay when you do owe taxes at the end of the year.) So the question is how to you account for the over payment? Presumably CRA takes witholding taxes and adds that to current year.


CRA may be better now but I have had them take payments as instalments and then penalize for non-payment of arrears. They eventually sorted it all out but I lost my confidence in their competence at the time .


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## afulldeck (Mar 28, 2012)

kcowan2000 said:


> CRA may be better now but I have had them take payments as instalments and then penalize for non-payment of arrears. They eventually sorted it all out but I lost my confidence in their competence at the time .


Well, the good news is that I paid the Installments for '21 already, 'over paid' the current year return with my payment intended installment for '22, and I paid my '22 installment again. No penalty here. Except CRA owns me money.....


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## like_to_retire (Oct 9, 2016)

I just pay my instalments the week they're due, so there's never any mix-up. Why do you pay so early?

ltr


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## afulldeck (Mar 28, 2012)

like_to_retire said:


> I just pay my instalments the week they're due, so there's never any mix-up. Why do you pay so early?
> 
> ltr


I'm lazy and forgetful when it comes to this stuff.

That said, I called CRA this morning to asked about how the money was allocated to the accounts. I was pleasantly surprised on two fronts. First, the wait was only 1 minute-before I got a live person. Second, since I have not submitted my taxes for '21 yet, and there was no tax owing for '21(installments where up to date), it was automatically allocated to the tax installment for '22 which is what I originally intended. Wonderful. Good Job on that one CRA....


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