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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 It'll be withdrawn every three months.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.
I didn't want to go this route because they add interest after april 30th.Quote:
Originally Posted by Spixie33
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! :(
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.Quote:
Originally Posted by Skysue
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 ;)
I think it is possible to owe depending on how organized you are with receipts, write offs and your spouses income etc.Quote:
Originally Posted by Skysue
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.
Flex - I guess it depends on how much you make. Our teacher said that as a provider you can earn up to around 25K a year and probably not pay taxes. If someone is making 50-60K then I am sure that is a whole different story. I have never even earned to 25K with the daycare because I operate under capacity so it is different. So far I haven't had to pay. This year I took on another full timer which will bring my income up quite a bit and I am thinking of adding another so I will probably be crying April 2013.
I guess if someone has 5 full time kids then they can probably expect to pay
You will always have to pay something towards your Canada Pension on self employed earnings. But for those with hubbies that complain remind them that they paid into the same plan all year and you got to hold onto your money all year so in the end it balances out. But yes I pay and hubby gets back. Have never paid more than about $800 including my CPP. Just as your hubby has taxes taken out of his paycheck every month, you should set aside an amount every month and yes taking one of the incomes from one child should be more than enough and then what isn't used from that child's income becomes your tax refund. Think about it - at $150 a week for the child x 50 weeks is $7500.00. If you owe even $2500 for taxes and CPP that is still a tax refund of $5000 to you and if you had been putting those monthly payments into an interest bearing option such as a TSFA then you will have more than the refund.
For hubbies that complain remind them to look at their paystubs and the total they actually made and the smaller amount they got to keep each month and how they have to wait till tax time to get any overpayment back whereas you get to keep ALL of your money and only give the government a dab of it come tax time.
I will be putting $ aside each month for the first time this year.
I'm totally stressing out about how much I will owe this year .
The first year I owed nothing, the second year I was closed for a few months so I owed just a bit but this year... :blink:
First thing to realize is that you take your total income and deduct your expenses for operating your daycare and the amount that is left is the amount your taxes are based on - not the total you earned. So if you earned $35,000 but had expenses of $15,000 which is possible by the time you do business use of home, food, toys, equipment etc. then you will only be taxed on $20,000 of income. Since one of the first thing you deduct is your basic personal exemption line 300 which is $10,527. You can see how your taxable income can very quickly go down.
Playfelt: what is this $10, 527 on line 300? Basic Personal exemption? Why? How? Everyone gets this?
Yes - everyone gets this .... the first $10,527 we earn is 'tax free' anything more than that is what we all pay tax on .... employed or self employed ... this is the challenge with some people who work several 'part time' jobs - their employer does not take income tax off assuming that they are going to earn less than $11,000 however between the several jobs they earn 'more' than this and get nailed :(Quote:
Originally Posted by FlexFunCare
Being self employed - if you can get your income down to $10, 527 you would not owe anything in 'taxes' just your CPP contribution which everyone has to pay -however this is where some people get a refund cause even though they have to pay the CPP their 'tax credits' are more than they 'owed' and they still get a refund despite not having paid anything all year long!