In: Accounting
For the taxation year ending December 31, 2018, George Glass had combined federal and
provincial Tax Payable is $13,680. The corresponding figure for 2019 is $2,220. For the
year ending December 31, 2020, it is estimated that combined federal and provincial Tax
Payable will be $11,220.
Required: George has asked you to provide the following information:
1. Indicate whether instalments are required during 2020. Provide a brief explanation of
your conclusion.
2. Calculate the amount of each instalment that would be required under each of the acceptable methods available.
3. Indicate the dates on which the instalments are due.
Your province or territory of residence will determine the threshold of net tax owing that you will use when determining if you have to pay tax by instalments.
In the given case, since it is not mention where George Glass is from , so we are assuming that person is from other province.
You have to pay your income tax by instalments for 2020 if both of the following apply:
Conclusion - After reading above case , we can conclude that george crossed threshhold limit already in 2018. Hence liable to pay instalments in 2020
Installment amount percentage and Date is provided below
Prior-year option – Calculate your 2019 net tax owing and add any CPP contributions payable, and any voluntary EI premiums payable. Pay 75% of the total on September 15 and 25% on December 15.
Current-year option – Estimate your current-year 2020 net tax owing and add any CPP contributions payable, and any voluntary EI premiums payable. Pay 75% of the total on September 15 and 25% on December 15.