What are Installment Payments?
If you owe taxes and would like to pay it in installments, you can complete Form 9465 with your return. This submits a payment plan to the IRS for approval. After your return is accepted, the IRS will contact you regarding the payment plan, the monthly amount, etc. so that you can pay your taxes in installments.
On occasion you may get a request from Canada Revenue Agency (CRA) asking you to pay instalments on your taxes. This request is computer generated and is a simple calculation on CRAs part whereby they assume that, next year you will owe them taxes. As a result, CRA wants you to pay your income taxes in advance. They do not want to wait until you file your tax return, but would rather you make installment payments now towards next years tax debt. In most cases, you do not have to make these installments, but its best to call them (1-800-959-8281) and verify. If you are required to make installments and you do not, CRA will charge interest on the amount you owe. On the other hand, if you do make installment payments, they will not credit you with any interest on your money. Any money that you pay in advance will be credited towards your next years taxes. If you overpay, you will receive it as a refund. Please make sure that you always put your SOCIAL INSURANCE NUMBER on anything you send
