It is reasonable to assume that many Canadians do not like to pay taxes, and it appears understandable to make such an assumption. However, the process of paying taxes in Canada to the CRA may not appear to be as overwhelming, as there are several methods available, which allow the process of paying taxes to be a little more simplified.
1. Online Banking
Toronto Accountants suggest that the first method proposed for paying taxes to the CRA, is a very simple process, which is a method similar to paying cable and gas bills. For this method, Toronto Accountants advise that once you are logged into the online banking website, you select the ‘Pay Bills’ option, and add a payee named Canada Revenue Agency or Receiver General. Once that has been established, you could choose from the options “CRA (revenue)-2015 tax owing,” “past-tax owed,” or “tax instalments.” If a payment is not paid in full, the payment should be made in “past tax owed.”
Overall, the key steps in using the Online Banking procedure, are as follows: enter your SIN number, select amount to be paid, select the account to pay with, and then finally, select the option of either a one-time payment or a recurring payment plan. For paying your business taxes, Toronto Accountants state that you could pay GST/HST (GST-P), you could file your returns (GST34), pay federal payroll deductions (PD7A) as well as corporate taxes (TXINS). Record keeping is simplified through this process, as each filing is issued a confirmation number.
2. Debit Card – Interac Online
The second method that Accountants in Toronto and Mississauga suggest in paying the CRA taxes is the CRA’s My Payment Service. This electronic payment method uses Interac Online from which you could make payments directly to the CRA from either an online personal bank account, or a business banking account. Through the CRA’s My Payment Service, one could pay individual income tax instalments, past tax owed, as well as current year tax owing. Businesses could also pay GST/HST, payroll source deductions, corporate income taxes, as well as non-resident withholding taxes.
However, Toronto Accountants state that it must be ensured that in order to use the CRA’s My Payment Service, the financial institution affiliated with the bank account used must be one of the following participants in the program: BMO, RBC, Scotiabank, TD Canada Trust, BC Envision Financial, Libro Credit Union and Windsor Family Credit Union. It must also be noted that, as this payment method is Interac Online, it can only be made by an Interac Bank Card, without the Visa logo.
3. Pre-authorized debit (PAD)
Moreover, an additional method suggested by Accountants in Toronto and Mississauga is the online, self-service payment option of Pre-authorized debit. In this method, the CRA withdraws the payment amounts from your Bank Account. This method could be used by Businesses as well as individuals, and it is capable of making several payments. In order to set-up a Pre-Authorized Debit payment, you could do so through CRA’s My Account for individuals, or My Business Account for businesses.
4. Credit Card
Normally, the CRA does not accept payments through credit card directly, however, you could use a third-party service provider. Toronto Accountants suggest that a preferable third-party service provider that one could use for payments by credit card is Plastiq. Plastiq offers payments towards T2 Corporation, T1 Individual, GST/HST, source deductions, and excise act. The service fee for these are 2.5% of the payment, and it also accepts Visa debit cards without a service fee.
5. Snail Mail
As a last resort, Toronto Accountants state that it is in fact possible to mail a cheque as payment to the CRA, with a cover letter attached to it. However, it must be ensured that the respective SIN number or Business number is stated, as well as the applicable year for the payment is declared, including whether it is for a balance, an instalment, year-end, or instalment year for HST and corporate taxes. This information is vital to be included on the cheque, in order to avoid any misallocation of amounts.
As Accountants in Toronto and Mississauga we suggest that there are several simplified methods to opt towards in making payments towards the CRA, it could be concluded that making tax payments is not necessarily as dreading as it tends to appear. SRJ Chartered Accountants are located in Toronto and Mississauga with satellite offices throughout Ontario (Hamilton, Kitchener-Waterloo, Ottawa and North York). We service clients all throughout the country and also globally with their Canadian tax and accounting needs.