Under Instalments - Individual, when is the balance due instalment required?

Under Instalments - Individual, when is the balance due instalment required?

• A. Balance due is estimated to be greater than $3,000 for the current year and was greater than $3,000 for one of the two prior years.
• B. Balance due is greater than $1,000.
• C. If the balance due is less than $3,000.
• D. Always required.

Answer: (B)

Instalments spread your tax payment across the year so you don’t face a large balance due at filing. For individuals, the trigger to start balance-due instalments is when the amount you owe for the current year after credits and withholdings is greater than a small threshold. That threshold is greater than 1,000. So if you expect to owe more than $1,000, you’re required to make instalment payments to cover that balance over the year. The other figures in the options relate to different rules or prior-year tests, but the standard criterion used for triggering the balance-due instalment is the balance due being greater than $1,000.

Instalments spread your tax payment across the year so you don’t face a large balance due at filing. For individuals, the trigger to start balance-due instalments is when the amount you owe for the current year after credits and withholdings is greater than a small threshold. That threshold is greater than 1,000. So if you expect to owe more than $1,000, you’re required to make instalment payments to cover that balance over the year.

The other figures in the options relate to different rules or prior-year tests, but the standard criterion used for triggering the balance-due instalment is the balance due being greater than $1,000.