You're probably aware that a personal income tax return is due by April 30 of the next year. In other words your return for 2007 will be due by April 30, 2008. If you run your own unincorporated business either as a sole proprietor or in a partnership, your return is not due until June 15 of the next year. The actual taxes, however, are still due by April 30, so it will be necessary to at least estimate what you owe and make sure your installments are close. If you are late with the return CRA will charge a 5% penalty on the amount owing.

If you do not pay the whole balance by the due date, an interest charge will be levied. Note that a penalty is for a late return whereas an interest charge is for a late payment. The CRA interest rate on insufficient payments is pegged each quarter and is termed to be the 'Prescribed Rate'. It should also be noted that this interest is not tax deductible and is therefore quite an expensive form of borrowing.

Personal tax installments are due on March 15, June 15, September 15 and December 15 of the current year (i.e., 2007 for the 2007 return). They are only due if the taxes owing before any installments exceed $2,000 either in the prior year or the current year. If installments aren't made in time the same interest penalty rate will apply to the amounts that weren't received on time.

If you are incorporated and a CCPC (Canadian Controlled Private Corporation), the income tax returns (there is a Federal T2 return as well as a provincial CT23 return in Ontario) are due six months after your fiscal year end. For example, a company with a November 30, 2006 year-end must file its corporate tax returns by May 31, 2007. The taxes themselves, however, are due three months after the year-end, February 28, 2007 in this case. As with personal tax, if you aren't going to file your return within three months of the year-end, you should at least estimate what the amount will be and try and make the payments before the three-month deadline.

As soon as you hire employees, you will be required to withhold amounts for Canada Pension Plan (CPP), Employment Insurance (EI) as well as personal income tax from all of your employees. CRA must generally receive these amounts by the 15th of the month following the month the pay cheques were dated. For example, the withholdings on pay cheques dated November 2, 16 and 30, 2006 would be due by December 15, 2006. Note that the pay cheque dated the 2nd may cover work done in October, but it is the date of the cheque that counts.

If your business has withholding amounts over $15,000, watch out. The withholdings are due the 10th of the next month (not the 15th) for cheques dated from the 16th to the 31st of the prior month and the 25th for cheques dated from the 1st to the 15th of the same month. The penalties for late withholding payments are steep. They take $500 off the amount and apply a penalty of 10%.

At many bank web sites, you can make payments for personal and corporate income tax, payroll taxes as well as the GST using on-line banking. This is not only convenient, but gives you a printed confirmation that the amount was received on time.