Did You get Your First Instalment Invoice?

I get a few calls this time of year from clients who have never had to pay instalments before and can’t believe that CRA will ask them for money for 2018 before 2018 is over.

September 15th is the date that the third instalment of the 2018 taxation year is due. However, for some people they have just received the first notification that they are being asked to pay 2018 instalments. CRA has finished processing the 2017 tax returns and if a balance was owing when the return was filed, CRA will often send out an instalment invoice.  The criteria is – If the balance is over $3,000 for the second year – now CRA wants its money up front, during the tax year. If you were not already making instalments, then CRA is calculating what you owe for 2018 divided into only two instalments, September 15th and December 15th. If you were asked to pay instalments for the 2017 year, then CRA has already sent you an invoice for March 15th and June 15th of 2018.

Provided you have the money, there is no disadvantage to paying the instalments. This is a simple pre-payment. If you don’t owe the tax when you file your 2018 tax return in April, then you will get a refund of what you have paid. If you don’t pay the instalments and you owe the money in April, then CRA is going to charge you interest.  Check out our chart on instalments.

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Painless Financial Training Group Inc. with Debi Peverill

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