It is important to know the amount requested by CCRA is not necessarily the minimum amount payable. CCRA will request instalments based on tax filings for the previous two years. If you anticipate your income is going to decline in the current year when compared to the prior year, you can reduce your instalments based on your estimated tax payable. No interest will be charged if the estimate turns out to be correct. If actual taxes end up higher than estimated, however, you will be charged interest on any deficiencies.
Farmers get a break relative to other self-employed individuals.
Retired folks with pension and investment income are often required to make quarterly instalments because of little or no withholding taxes on these sources. Many seniors arrange to have withholding tax taken off directly at source from OAS, CPP, RRIF and annuity payments. It is not possible to arrange for withholding taxes on dividends, interest and capital gains. Note that withholding taxes are required for dividends and interest income received from foreign sources. For example, dividends on U.S. shares attract a withholding rate of 15 per cent.