Avoid Tax Traps: Estimate Your 2018 Taxes Due

The June 15 tax filing deadline for proprietorships is just around the corner.  But, there’s another problem soon to befall delinquent taxpayers:  the tax collector is coming if you haven’t paid up, and you can expect a “no excuses” approach.

Canada Revenue Agency’s uncollected tax debt was estimated to be around $38 Billion in 2016, and they’ve been cracking down on delinquent Canadians.

Over the past decade, the CRA’s undisputed tax debt has grown by $20 Billion, and their increasingly aggressive collections and audit practices are designed to make an example of non-compliant taxpayers while increasing revenues. As interest rates rise as forecasted, penalties for non-payment will too, making this a tax trap you don’t want to get yourself caught in. If you’re self-employed, or a full- or part-time worker, you’re responsible for self-assessing the taxes you’ll owe, to be remitted to the CRA in installments during the tax year, or by April 30, 2019, for the 2018 tax year.

Making arrangements to pay off prior years’ tax debt should be a priority, as the taxman has the power to garnishee wages and seize assets. If you’ll also owe taxes on your 2018 income, start planning now; calculate the taxes due on your projected earnings so you avoid the harsh penalties that come with failure to pay.

Also ensure that you think about the tax provisions you may have missed out on by filing in a hurry or without full knowledge of your rights – will adjusting prior filed returns help you recover money that gets you out of your current tax paying dilemma? A visit with a DFA-Tax Services Specialist can really pay off.

This professional can calculate what you’ll owe based on your projected annual income, and recalculating for any income adjustments as they occur. Knowledge Bureau’s Income Tax Estimator can help you complete this process with accuracy, so you know how much you need to put aside for your taxes every month..

The Income Tax Estimator Calculator helps you determine total taxes owed for individuals or couples, taking into account a variety of revenue sources, RRSP contributions, income splitting and government benefits. This essential tool has been updated to incorporate the latest tax changes.

Try the basic Income Tax Estimator, or sign up for a free trial of the Client Relationship Toolkit – subscribing gives you access to fifteen tax calculators that can help you estimate take-home pay, investment and retirement income, marginal tax rate, debt management and more.

Additional educational resources: if you’re a proprietor ready to learn more about tax planning, sign up for the certificate course, T1 Professional Tax Preparation – Proprietorships. Save on tuition before the June 15 registration deadline, or see what the course is all about by taking a free trial. Also register to attend the fall CE Summits this November, where the focus will be on year-end planning for investors and small businesses.

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