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Adam, an Ontario taxpayer, has come to you for advice on the payment of income tax instalments. He has provided you with the following

Adam, an Ontario taxpayer, has come to you for advice on the payment of income tax instalments. He has provided you with the following information on his actual or estimated combined federal and provincial tax liability and the actual or estimate amounts of withholding by his employer: 2017 Total income tax liability $29,000 Total income tax withheld 28,000 Required: (a) (b) $25,000 22,000 Estimated 2018 $35,000 27,000 2019 Briefly explain whether Adam is required to make income tax instalments in respect of 2019. (3 minutes) Calculate the options for the instalment payments in 2019 and indicate when they are due. (1 minutes) What are the consequences of not paying the final instalment until Adam files his tax return on April 30, 2020? Assume that the basic prescribed rate on employee or shareholder loans is 6%. (Ignore the effects of any leap year). (3 minutes)

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