Question About Paying Income Tax Owing to the Canadian Government?
July 29, 2010 | In: Uncategorized
Is it better financially in the end to completely drain your savings to pay off income tax owing to the government, or should you use your line of credit instead? Which would be better financially in the long run?
Thanks!
1 answer
short shrimp
July 29th, 2010 at 7:55 am
Well… draining your savings/emergency fund is never a good idea.
Taking the money from your line of credit would only be a wise idea if the interest rate is LOWER than what the government charges on overdue taxes.
Currently, the government charges 5 % for overdue taxes. If you are like most people, your interest rate on your line of credit is probably over 6 %.
Best thing to do is to pay the government in installments. That makes the most financial sense.