In this video, I show you how to pay your self-employed tax instalments to the CRA. I have to pay quarterly taxes for the current tax year, instead of paying one lump sum at the beginning of the next tax year. In other words, because of how much my business earns, I have to pre-pay my taxes in instalments throughout the year.
Think of it like if you were to work for a company, and they take some money off your paycheque for taxes. What they're actually doing is taking that money and pre-paying it to the CRA on your behalf so hopefully you won't have a tax bill when you file your tax return because you've already paid what you owed.
This is the same concept. You're prepaying your taxes but as a self-employed person. And hopefully, you'll pay the correct amount so you won't owe any more tax, or maybe you'll owe a little bit more tax depending on your business earnings for the year, or in the case that you've paid too much, you'll get a tax refund.
Now what's important to remember is that income tax and sales tax are completely separate. You file and pay your GST/HST using the CRA My Business account. And if you need to file and pay PST for one of the provinces that may require you to (BC, Saskatchewan, Manitoba, Quebec), then you have to do that through their provincials sites. I have videos on how to do all of this in this playlist: https://www.youtube.com/playlist?list=PL5eULUZCKzPwzb4C8eFNk9sxf3Sr7pr_Q
For income tax, you would pay your instalment payments through your CRA My Account (your personal CRA account). That's because when you're a sole proprietor, your business and you as a personal taxpayer are the same entity.
If you have any questions about this, drop them in the comments!
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RESOURCES
➡️ Required Tax Instalments for Individuals https://www.canada.ca/en/revenue-agency/services/payments-cra/individual-payments/income-tax-instalments.html
➡️ Who Has to Pay https://www.canada.ca/en/revenue-agency/services/payments-cra/individual-payments/income-tax-instalments/who-pays-instalments.html
➡️ Interest & Penalty Charges https://www.canada.ca/en/revenue-agency/services/payments-cra/individual-payments/income-tax-instalments/interest-penalty-charges.html
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I'm Jessica Moorhouse, a money expert, Accredited Financial Counsellor Canada®, speaker, blogger, YouTuber, and host of the More Money Podcast. I'm based out of Toronto, ON, Canada and turned my personal finance blogging side hustle into my full-time business so I could spend all my time teaching others how they can take control of their lives by taking control of their money. To learn more, check out my website https://jessicamoorhouse.com
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The content I produce is for education and entertainment purposes only. Nothing on this YouTube channel, my website or affiliated channels should be considered financial, investment or legal advice, or an endorsement for any type of service, product, or brand. Some links in this description may be affiliate links in which I may earn a commission at no extra cost to you. Please read my disclaimer to learn more: https://jessicamoorhouse.com/disclaimer/
