Avoid December 15 Instalment Payment If Possible

An important message for those who are cash-strapped this Christmas: look to your tax filing habits for some cash flow relief. Some Canadians have to prepay income taxes by making quarterly instalment payments. This includes those who report income from self employment, investments, or other sums from which tax is not withheld at source. When you fall into an instalment payment profile, you will start receiving a regular billing notice from Canada Revenue Agency reminding you to pay on time. Trouble is, if your income has dropped since you last filed a tax returnóand that's quite possible given recent financial turmoil--CRA will not know to reduce your payments.

Good news: reducing your quarterly instalments is easy, and this is important now, just before the final December 15 quarterly instalment is due, or the annual December 31 instalment for farmers and fishers is payable! Simply write a letter to request a revised billing based on your estimated income for the current year. This is a much better way to manage your cash flow at Christmas time and use the money to pay down credit cards more quickly, or better yet, fund a family vacation.

Professional tax and financial advisors can help, but it is important to make that appointment with your advisor now.