How to Make a Payment to the Canada Revenue Agency (CRA)

Do you owe money to the CRA?  Are you in Collections?  Do you have CRA debt?  Are you looking to make an installment payment, or a payroll remittance?  How about a GST/HST payment or remittance?

If any of these apply to you, then you need to know how to make a payment to the to the Canada Revenue Agency (CRA).

If you have to make a payment to the Canada Revenue Agency (CRA) for either tax arrears or with a filed return, or as a remittance / installment, you have no excuses!  You can use any of the following options:

  • Your financial institution’s telephone or online banking service
  • The CRA’s pre-authorized debit service offered through My Account, which lets you:
    • set up a payment from your bank account to the CRA on a pre-set date
    • pay an overdue amount or make instalment payments
  • The CRA’s My Payment service, which lets you make payments online. You can use this service if you have Visa®Debit, Debit MasterCard® or Interac®
  • Online at a participating financial institution
  • Through a third-party service provider which offers payment by credit card or PayPal.
  • In person at any Canada Post outlet using cash or debit card.

 

What if you cannot pay in full, or if the CRA is all over you and you want to make a payment but don’t want them immediately sending a Requirement to Pay to your bank account and freezing it? 

 

If you owe money to the CRA but are unable to pay the full amount now, or if you need the CRA to work with you and set up a payment arrangement – to make smaller payments over time until you have paid your full debt (including penalties and interest), you should contact inTAXicating Tax Services through our website www.intaxicating.ca to schedule a meeting.

Aside from helping you make that payment, and avoid the garnishment, we can also assist with a wide variety of tax matters.

We can also assist with the potential cancelling, waiving or reducing the amount of penalties and / or interest you owe through the CRA’s Taxpayer Relief Program.  Results are never guaranteed, however, you stand a 0% chance of having the penalties and / or interest reduced or waived entirely if you do not apply.

Email: info@intaxicating.ca

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You Filed Your Tax Return to the CRA. You Owe CRA Money. Now What?

You have filed you Canadian personal tax return by the April 30th deadline and you owe the CRA money.  Now what?  You have heard horror stories about how the Canada Revenue Agency goes about collecting taxes dollars.

You need to act fast, right?

Well that is exactly what is wrong with tax-filing season in Canada.

What about if you owe more to the CRA because you already have a balance, or if you happen to be self-employed and you plan on having your tax returns prepared after the April 30th deadline, but before the June 15th deadline for self-employed Canadians, and you find out that you owe money to the CRA?

Or, what if you carry a balance year-over-year because between taxes owing and installment payments, you just can’t keep up?

What do you do?

What are your options?

If you listen to the radio, you are likely to have noticed that about every 3rd ad is a commercials talking about debt.  In these commercials, very calm voices talk about how it feels to be in debt and how they a simple solution for debt.  They even refer to “programs” which are supported or endorsed by the Canadian government. and in 10 minutes / 15 minutes / 20 minutes, you too can be debt free.

It’s convenient.  Too convenient…

Their solution is bankruptcy or a consumer proposal, and their solution is a great way for you to no longer have debt owing to the Canada Revenue Agency, or your credit card provider, etc.

What they fail to mention, is that you are paying them money to trade your debt problem for a credit problem.

Sure, you won’t owe the CRA any more, but now that the euphoria of that “win” has worn off, you now have to face reality that you have no credit for 3-7 years at best.  During that 3-7 years, you won’t have a credit card unless it’s a prepaid one, and you won’t be able to get a loan, and you cannot be the director of a corporation.

During that period where you are under a  proposal or in bankruptcy, the CRA can, and still will raise assessment where they are allowed by law to, such as raising s160/s325 assessments for assets transferred to avoid paying the CRA, or if you act as a director even though the director is someone else’s name.

Forget about it if the CRA has already placed a lien on an asset.  That survives a bankruptcy.

But the commercials make it sound SO appealing, so quick, and so good.

I’ve always felt that bankruptcy and Consumer Proposals are great options for people with no options.  If your debt is tax-related then you really should know what your options are before jumping at the first thing you hear and making these Trustee / Insolvency firms rich, so they can advertise even more, but up bigger billboards and open their own “tax solution” businesses to “help” you with your tax problems.

Don’t fall for the easy way out, because you get way more than you bargained for!

Instead, contact us, inTAXicating, and let us diagnose your debt, and tell you the best options for you, and not what works best you the trustee or the CRA.

http://www.intaxicating.ca

The CRA Wants You To Make Your Installments! You Do Too!!

Did you know?

You can see your installment amount in the CRA’s My Account and make your installment payments online.

Even better, you can see your installment amount online!

To see your installment amount online, you need to login to My Account, select “View mail,” and click “Instalment.” If you don’t have My Account, you can register now, I’ve hyperlinked it for you, but understand that the registration process can take weeks.

Also, I do not recommend providing the CRA with Direct Deposit information if you have a tax liability or intend on having one any time soon as they will use that bank source to clean out your bank account… I’m just saying…  If I still worked there, I would too.

Back to installments…

Don’t forget: If you signed up for online mail, you may receive an email notification for your instalment reminder from the CRA!

If you fail to make your installment payments you will be penalized by the CRA, as laid out here;  http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/pymnts/nstlmnts/ntrst-eng.html.

Instalment interest

You will be charged interest if all of the following conditions apply:

  • The CRA sends you an instalment reminder in 2016 that shows an amount to pay
  • you must pay by instalment in 2016
  • you did not make instalment payments, or you made payments that were late or you paid less than what you had to pay

The CRA charges instalment interest on all late or insufficient instalment payments.

Instalment interest is compounded daily at the prescribed interest rate.

How the CRA determines the interest?

  1. The CRA calculates interest on each instalment payment that you should have paid from the day it was due to your balance due date based on the payment option that results in the least amount of interest.
  2. The CRA calculates the interest on each instalment you paid for the year starting from the later of the date the payment was made or January 1 up to the balance due date.

Then, they determine the interest you owe by charging the difference between a. and b., if the difference is more than $25.

Instalment penalty

You may have to pay a penalty if your instalment payments are late or less than the required amount.

The CRA apply this penalty only if your instalment interest charges for 2016 are more than $1,000.

To calculate the penalty, the CRA will determine which of the following amounts is higher:

  • $1,000, or
  • 25% of the instalment interest that you would have had to pay if you had not made instalment payments for 2016

Then, they subtract the higher amount from your actual instalment interest charges for 2016.  Finally, they divide the difference by two and the result is your penalty.  Clear as mud, eh?

Example

For 2016, John made instalment payments that were less than he should have paid. As a result, he has $2,500 of actual instalment interest charges for 2016. If John had not made any instalment payments in 2016, his instalment interest charges would have been $3,200. Since 25% of $3,200 is $800, we subtract $1,000 (the higher amount) from $2,500. The difference is $1,500. Then, we divide $1,500 by two. John’s penalty is $750.

Now the good part!

How can you reduce your instalment interest and penalties?

You can reduce or eliminate the interest charges and penalties by overpaying your next instalment payment or by paying it early. By paying early or overpaying, you will earn instalment credit interest. This credit interest is not refundable and can only be used against any interest charges on late payments for the same tax year.

 

How to Pay:

Choose the electronic payment method that’s right for you:

Online banking – Through your financial institution’s online banking, add the Canada Revenue Agency (CRA) as a payee and look for the “tax instalments” payment option.

Debit card – The CRA’s My Payment service lets you pay with your Visa® Debit or Interac® online debit card through participating financial institutions.

Pre-authorized debit – You can set up a tax payment in advance. You choose the bank account, the amount, and the date or dates of the transaction.

Credit card – You can use a third-party service provider that offers additional payment methods, including credit cards.

Carefully enter your social insurance number as your account number so the CRA can apply your payment to the intended account.

For more information, watch our video Change it up: Pay your taxes online and, go to make a payment to the Canada Revenue Agency.

Stay connected with the CRA:

On Twitter – @CanRevAgency.

Subscribe to a CRA electronic mailing list.

Add their RSS feeds to your feed reader.

You can also watch their tax-related videos on YouTube.

 

CRA to finally accept payments via Interac Online

Monday 5 October 2009

 

The Canada Revenue Agency (CRA) has integrated Interac Online, an internet payment method which enables Canadians to make income tax payments directly from their bank accounts, without disclosing personal financial data.

As a result of the initiative, starting October 5th 2009, taxpayers and businesses will be able to pay online for various types of taxes, including income taxes, corporate taxes, payroll taxes, and GST, as well as make one-time payments and instalments.  Interac Online works with existing online banking services of participating Canadian financial institutions.

Public Works and Government Services Canada, which establishes banking services for the Government of Canada, has made it possible for the CRA to implement this new service.

Finally!