If you're self-employed, you may receive wages that don't have taxes withheld. You may have to pay tax by instalments to make up for it. Let's go over what you should know about paying tax by instalments.
Most people who receive wages without tax withheld have to pay tax by instalment. This includes the self-employed, those who receive rental or investment income, income from more than one job and even some who get pension payments. Keep in mind, this applies to people who do not have enough tax withheld for more than one year.
You must first know your:
To determine your net tax owed, calculate what you owe using this chart. Pay tax by instalments if the following two factors apply:
You don't have to pay tax by instalment if your owing for 2018 is $3,000 or less. This applies if your net tax owing is $1,800 or less for residents of Quebec. There are some specific requirements if your income comes from fishing or farming, so consult your tax professional before making any decisions.
Your instalment due dates are:
The CRA will send instalment reminders to certain taxpayers. It will send out instalment reminders in: