Corporate Instalment Payments

[eblend]

Hi guys,

I am incorporated and just doing taxes for my first year as a business. I do have an accountant friend who helps me out, but I told her that I want do this this myself as much as possible and learn along the way, so I only bug her for things I need clarification on and such.

She is super busy right now with all the year ends and told me that if I am confident in my numbers in the tax program (which I am very confident in) I can just pay the amount of taxes owed as an installment, and she will help me out once she is done as the filing date is past the payment date.

Anyways, I have never done these installments and just want to clarify something.

1. Do I just pay the government how much I owe according to the tax program, and then make another payment for current year as well as I will be on quarterly installments, or can I just make one payment now that covers taxes from last year + the first quarterly installment this year? Do I have to specify somehow that this portion is taxes from last year and this is from this year, or do they not care, as long as I pay them sufficient amount?

2. How does one really calculate how much to pay the government? I have a good idea of my monthly revenues and such, so just use that as a base and calculate the installments, or should I overpay a bit?

Thanks

[Sugarphreak]

...

[phreezee]

AFAIK
Your installments are based on your first year taxes.
1)Pay the first year in lump sum, and then start installments for 2nd year.
2)Divide 1st year total taxes by number of installments

Pay before the 15th of the month it's due, otherwise you get fined.
HTH

[eblend]

Originally posted by phreezee
AFAIK
Your installments are based on your first year taxes.
1)Pay the first year in lump sum, and then start installments for 2nd year.
2)Divide 1st year total taxes by number of installments

Pay before the 15th of the month it's due, otherwise you get fined.
HTH

Cool thanks for the quick summary. Sometimes the amount of information out there is overwhelming.

[bigbadboss101]

Do you use the CRA site to see your personal and corp account. You can see your filings, account balances, installments etc. I do my installments quarterly. My colleague does not pay and said he is ok with a bit of paid interest. After your filing your assessment will let you know if you need to pay more or get a refund.

[eblend]

Originally posted by bigbadboss101
Do you use the CRA site to see your personal and corp account. You can see your filings, account balances, installments etc. I do my installments quarterly. My colleague does not pay and said he is ok with a bit of paid interest. After your filing your assessment will let you know if you need to pay more or get a refund.

Yes I have a My Business account, the only thing I have paid to date was GST.

Since this is my first year doing this, I presume I can just pay through there?

How does one go about paying the Alberta portion?

Also, my last year the business was only active for 7 month, so this year for installments should I be calculating a full year equivalent of taxes?

[suntan]

You can never put money in for the previous tax year.

It's moot. The fine is so small it's irrelevant. They charge you something like 1.5% interest. My "fine" last year was $136.

In order of importance:

- Always pay GST on time. The fine for missing this is huge.

- Pay any payroll taxes due on time. Also make at least 1-2 installment payments for it. CPP you have until Jan 15 to pay it. Don't miss it - they'll kill ya.

- Corporate tax you can wait until the last minute to pay.