Tax Installments

Does anyone here do tax installments throughout the year to avoid that deep stinking feeling in the pit of your stomach when tax time comes around?

I would like to . . . .

If I could just figure out how . . . .

I feel like a moron. I'm an intelligent person but that CRA website is killer to navigate at times. . . . and really vague at others

Do you mean that you want to set a portion of your income aside for income tax purposes in preparation for the next year? are you wondering how much to set aside every month?

Or do you mean that you know you will owe XXX$ and don't want to pay it all at once and want to set up a repayment plan with revenue Canada? In this case you call Revenue Canada and tell them that you owe XXX$ and can't afford to pay it as a lump sum and ask them what your options are for paying it. They will usually advise you how much it would be monthly, or semi monthly etc and let you know all the details and set it up with you over the phone.

Another good option is to set up a Tax Free Savings account to automatically withdrawal said amount per month, then you are prepared at tax time. Even if your short a couple bucks it's a lot easier to come up with. But on the other hand if you have a little extra you can go ahead and buy something special for the daycare! At least with this option you are gaining a little interest (not much) but every penny counts. :)

I've started to put away one child's fee. She's only part time but every little bit will help!

I figured it all out. Can't believe I couldn't before. I set up an automatic installment plan with the Canadian Revenue Agency. It'll be withdrawn every three months. I might even end up getting most of it back at the end of the year after all my deductions are taken into consideration.

What had me stuck is that I did't want to make installments every 'so many' months. I wanted to give a percentage every week, or pay when I wanted to. Doesn't work that way though . . 'sigh'

What got me started on this is that I just hate knowing I'm going to owe at the end of every year (when everyone else I know is excited about how much they'll be getting back). It's hard to save money for an entire year to see it blown at H&R block in a half hour period. It just hurts my heart.

What's worse is that the amount my hubby got back is about the exact I owe this year. So he has to deal with the fact that he has to give up this big chunk of money he thought he was going to get to blow on whatever stupidness he wanted.

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Originally Posted by Spixie33

Do you mean that you want to set a portion of your income aside for income tax purposes in preparation for the next year? are you wondering how much to set aside every month?

Or do you mean that you know you will owe XXX$ and don't want to pay it all at once and want to set up a repayment plan with revenue Canada? In this case you call Revenue Canada and tell them that you owe XXX$ and can't afford to pay it as a lump sum and ask them what your options are for paying it. They will usually advise you how much it would be monthly, or semi monthly etc and let you know all the details and set it up with you over the phone.

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I didn't want to go this route because they add interest after april 30th.

Ladies have you actually had to owe at the end of the year? We get to right off so much that it seems not fare if we would have to owe? Doing mine for the 1st time this year now I feel really sick! :(

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Originally Posted by Skysue

Ladies have you actually had to owe at the end of the year? We get to right off so much that it seems not fare if we would have to owe? Doing mine for the 1st time this year now I feel really sick! :(

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How much you pay or not will depend on your 'household' income and other factors ... I have peers who get 'refunds' between them and their spouse being eligible for credits and others who have to pay between $500 - $1500 and a few who have to pay even more than that.

Depending on how much you owe in one year you have no choice but to do the 'installments' - forget how much it is - somewhere around that $1500 mark ... however unless I HAD to do the installments I personally would rather KEEP my money until April 30th final due date ... I put aside money each month into a high interest savings account for taxes and want to earn as much as possible on it before handing it over to the Tax man ;)

Quote:

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Originally Posted by Skysue

Ladies have you actually had to owe at the end of the year? We get to right off so much that it seems not fare if we would have to owe? Doing mine for the 1st time this year now I feel really sick! :(

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I think it is possible to owe depending on how organized you are with receipts, write offs and your spouses income etc.

Our teacher during a Daycare course said that most people should be able to make about 25,000 a year and have no money owing if they do their write offs

I am scared every year when I go see the accountant. lol So far so good but it is still scary to think that one of these days it could happen that I owe. I think my hubbies refund usually balances stuff out for us.

I don't know how it's possible that you don't owe. How do you get away with $50, 000-$60, 000 worth of write off's? I spend A LOT of money on the daycare and write off EVERYTHING I possibly can but even after all that you usually come out with a profit of SOMETHING. Taxes are around 10% of that profit.