Entrepreneurship & Small Business

I incorporated, do I pay quarterly taxes?

  • Last Updated:
  • May 5th, 2011 3:09 pm
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[OP]
Jr. Member
Feb 18, 2007
139 posts
17 upvotes

I incorporated, do I pay quarterly taxes?

I incorporated my business last month and was wondering what I do now with taxes? Do I pay them quarterly?
6 replies
Member
Aug 1, 2008
284 posts
50 upvotes
Toronto
Unless you are in the mining business, your first corporate tax payments are not due until two months after your first fiscal year-end (or three months, if you have less than $400K in business income). See more details here.

After your first year -- if you pay more than $3K in corporate tax -- you'll shift to monthly installments (or quarterly, if you qualify).

GST/HST payments are still due quarterly. If you have staff, payroll taxes are still due monthly.
Sr. Member
Jan 1, 2009
989 posts
314 upvotes
Vancouver
Islington wrote:
Dec 1st, 2010 10:38 am
Unless you are in the mining business, your first corporate tax payments are not due until two months after your first fiscal year-end (or three months, if you have less than $400K in business income). See more details here.

After your first year -- if you pay more than $3K in corporate tax -- you'll shift to monthly installments (or quarterly, if you qualify).

GST/HST payments are still due quarterly. If you have staff, payroll taxes are still due monthly.

T2's are not due until six months after the corporation's FYE.
Deal Addict
Sep 1, 2005
1493 posts
362 upvotes
Vancouver
Islington wrote:
Dec 1st, 2010 10:38 am
GST/HST payments are still due quarterly. If you have staff, payroll taxes are still due monthly.
GST can be annual/quarterly/monthly .. depending on thresholds and whatever you chose on registration
Payroll again is based on thresholds/frequency of pmt, but first year?.. actually don't know off hand if there's a requirement
Cypherus21 wrote:
Dec 1st, 2010 11:53 pm
T2's are not due until six months after the corporation's FYE.

T2s don't have to be filed for 6 mos, but the tax is due as stated above (with interest being charged on o/s balances)
Deal Addict
Aug 28, 2007
1851 posts
245 upvotes
Calgary
All the above posts are correct, but the advice needs to be: "CRA does not even know you're alive until you submit your first returns, but you should be prudently setting aside a percentage of your revenue to pay the tax liability when it finally arises."

In your first year, earmarking about 20% is a safe number. With good record keeping on your part (and a good accountant) your tax burden will be well below that. You can fine tune the amount you're setting aside as the years go by (and any tactics on what to do with the idle cash for the time it's sitting there). Better to have more than not enough. Depending on your type of business, even modest businesses can be writing a 5 figure cheque to pay taxes. It is a daunting experience if you've spent all the money you brought in.

And once CRA knows your revenue from your first year, you can be absolutely certain if your revenue is high enough, they will have you on quarterly or monthly instalments, because they don't trust you to be prudent!
Banned
Apr 9, 2011
10 posts
UAE/Dubai
It is a better option to seek the advise of a local tax consultant.
Newbie
Nov 13, 2010
3 posts
toronto
Hi, here is some info might be helpful to you.

Corporate tax return is T2. and T2 deadline is 6 month from your corporation's year end. ex, if your corporation year end is Dec 31, 2010, then your T2 filing deadline would be June 30, 2011.

The quarterly installments you are referring to is for the following situations (both HST and income taxes), if on an annual basis, your net tax owed to CRA is greater than 3000 dollars, you are required to pay quarterly equal installments to CRA.

There are typically rooms available for tax planning within corporations, if you need more info, you can PM me, I am a Chartered Accountant who runs a small practice in North York.

Good Luck!

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