How some Canadians may defer current income tax payment

joyfulguyMarch 3, 2009

Many taxpayers who had a substantial amount of income tax to pay when they filed their return were required to pay tax by instalments in the following year, but those who had a small amount of tax owing were not required to do so.

Several years ago those who had to pay over $2,000. tax with their return were required to pay about a quarter of that amount quarterly during the year ... with interest compounded daily on late payments.

As I had to pay just over $2,000. with my return, I had to pay by instalments ... and sometimes missed quarterly deadlines. I'd thought to instruct a pension carrier to deduct some tax at source, enough to bring my amount owing at the time of sending my return to lower than $2,000.00.

Then the tax rules changed to allow one to pay up to $3,000.00 with one's return before being required to pay by quarterly instalments ... and I qualified, so recently have avoided having to pay by instalments, as I paid under $3,000. at the end of April.

I think that this issue may relate more often to people on pension than to people earning income from employment.

Good wishes for increasing skill at managing your income and assets effectively ... and reducing or deferring tax liability.

ole joyful

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lucy

Lots of good points!

    Bookmark   March 13, 2009 at 7:22AM
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joyfulguy

Won't work for this year - a couple of unexpected payouts last year put my income up to where I had a substantially larger tax bill so was required to send a cheque somewhat over $3,000. with my tax return ... so it'll be back to paying by instalments again, next year.

In 2007 I paid about 9% of income ... but the percentage will be higher in 2008.

ole joyful

    Bookmark   May 7, 2009 at 6:45PM
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