what is the balance, why do you (still!) have to pay?

INCOME TAX. For many taxpayers, this tax return for the year 2019 to be completed during this period can be synonymous with a cold shower. At the end of the declaration, they are asked to pay a balance of income taxes, in addition to the source deduction already paid. What are the reasons, what does it correspond to? Here are the explanations.

[Mis à jour le 29 mai 2020 à 14h29] Don’t miss the deadline to complete your tax return! You only have a few days left. If you’ve already looked into it or are about to do so, one term may surprise you this year: the income tax balance. The following line can be scary because at the end of entering your return, the tax authorities can tell you that you are liable for income tax for the year 2019.

It’s the cold shower, especially since you thought you had settled everything through the withholding tax? Before contacting your tax center or moping around complaining about a tax administration error, be aware that you will not be alone in this case. Withholding tax does not delete the income tax return. Consider that this is now a means of adjusting your withdrawal rate. And if your income in 2019 was greater than what the administration could have calculated on the basis of your last declaration, the tax for which you are liable has not disappeared with a magic wand. Hence this balance which will have to be paid. Do not panic, we explain everything to you on this question below.

Were you sure you were calm with the withholding tax? In any case, the latter implies the disappearance of your tax obligations. So the tax return remains essential. It allows you to adjust your withholding tax rate if necessary, but above all to determine if you liable for an income tax balance. To do this, the tax administration will compare the income you have declared, and ultimately your real income tax for the year 2019, then deduct the source deductions this year. Three situations can arise:

  • You owe an income tax balance : in this case, your source deductions for the whole of 2019 were less than the actual amount of income tax for which you are liable. Several factors can lead to this situation. For example, you may did not declare to the tax authorities an evolution of income (wages, financial, property, etc.) during the year, which would logically have resulted in an adjustment to your withholding tax rate and / or your down payments. Another possibility raised by Income : the tax authorities did not take into account an increase dating from 2018, because the rate applied from January to summer 2019 was based on the 2017 income tax return. Finally, you may therefore have received an advance of recurring tax credit too high.
  • You get a refund: you have been overcharged compared to what you actually owe. “If you benefit from a refund, it will be refunded directly to the known bank account of the DGFiP, if you have communicated one, otherwise by mail with a check to be cashed directly with your bank”, explains t -on on the administration site.
  • You have nothing to pay

Attention: It should be understood here that the taxman does not charge you twice. He only comes, if necessary, correct what you actually need. Do you actually have to pay an income tax balance? If its amount is less than 300 euros, the direct debit will be made September 25, 2020 all at once. If it is more than 300 euros, four monthly withdrawals, from September to December, will be made by the tax administration. To prevent the cold shower from repeating itself next year, be vigilant and take the lead: inform the tax authorities of the slightest change so that your withdrawal rate is modulated, or even delete deposits.

Due to the coronavirus epidemic, the tax calendar has been revised. The reporting period started on April 20, 2020, not April 9. The dates then range from early to mid-June. The tax return, relating to the income for the year 2019, must be returned before June 12 if you use the paper form. As a reminder, only tax households that do not have access to the Internet can use it. For others, the deadline for online tax returns depends, like last year, on your department number:

  • Departments 01 to 19: June 4, 2020
  • Departments 20 to 54: June 8, 2020
  • Departments 55 to 976: June 11, 2020

Keep in mind that a late return of income exposes you to an increase in the amount of your income tax.

The tax administration studies all income (wages, pensions, pensions, property income) that you collect on the tax year, so in 2019 for this year. First, it is necessary to determine net taxable income – information that you can find on your pay slip if you are an employee. If this is not the case, use the document attached to the tax return, which specifies the allowances and deductions. As a reminder, a standard deduction of 10% is applied, for professional expenses. The minimum amount of this deduction is 441 euros for 2019. It is capped at 12,627 euros per member of the household. If this reduction is lower than the total of your professional expenses, you can then deduct the amount of your real expenses.

What is the family quotient?

Have you determined your taxable net income? You must divide it by the number of shares of your tax household. You get your family quotient. The family quotient is used to determine taxable income for the tax household. Apply the amount obtained to the tax scale. In 2020 for the taxation of income for the year 2019, the tax reduction linked to the family quotient is limited to 1,567 euros for each additional half share and at 784 euros for each quarter share additional.

The family quotient according to the size of the tax household
Number of children Number of shares for a married or PACS couple Number of shares for a widower or widow Number of shares for a cohabiting couple Number of shares for a single person
Source: Directorate General of Public Finances
0 2 1 1 1
1 2.5 2.5 1.5 2
2 3 3 2 2.5
3 4 4 3 3.5
4 5 5 4 4.5
Per additional child 1 1 1 1

Income tax works with a tax schedule. So, a rate between 0 and 45% applies to each income bracket of the income tax scale. Very concretely, if your net taxable income is below a certain threshold, a zero rate is applied. These famous rates apply to a fraction of household income. The total amount of tax results from the addition of the different tranches. Here is the income tax scale that applies to income in 2019 :

Annual income groups Applicable rate
up to 10,064 euros 0%
from 10,065 euros to 27,794 euros 14%
from 27,795 euros to 74,517 euros 30%
from 74,518 euros to 157,806 euros 41%
from 157,807 euros 45%

Please note: in spring 2020 the administration will adjust your withholding tax rate, which will apply from summer 2020 until summer 2021. This calculation will be made from ‘another scale, taking into account the lower tax on income recorded last year. Do you want to know the income tax scale that applies to income received in 2020? Here it is :

Annual income groups Applicable rate
up to 10,064 euros 0%
from 10,065 euros to 25,659 euros 11%
from 25,659 euros to 73,369 euros 30%
from 73,370 euros to 157,806 euros 41%
from 157,807 euros 45%

In which cases can we benefit from a discount or a reduction?

Some tax households can benefit from a discount on income in 2019, if the gross amount of their income tax does not exceed a certain threshold. Here are the ceilings not to be exceeded for income in 2019:

  • For a single person : 1,611 euros. “The discount is equal to the difference between € 1,208 and 3/4 of the amount of your tax,” says one on the site service-public.fr.
  • For a couple subject to common taxation (married or PACS) : 2,653 euros. “The discount is equal to the difference between € 1,990 and 3/4 of the amount of your tax”, we complete.

It is possible to benefit from a reduction of 20% of your income tax, when your reference tax income does not exceed a certain threshold. Here are the reference tax income limits not to be exceeded for 2019 income:

  • For a single person : 19,175 euros.
  • For a couple subject to common taxation (married or PACS) : 38,350 euros.

Note: these amounts do not take into account any increase in your family quotient. Are you single and your tax reference income exceeds the threshold of 19,175 euros for the year 2019? “You can benefit from a degressive reduction if your RFR is higher than these values”, recalls service-public.fr on its dedicated site. To obtain this degressive reduction, a single person must have an RFR between 19,175 and 21,248 euros.

Do you want to check for yourself the amount of your income tax relating to income in 2019? A simulator is available here. You have the possibility to choose a simplified model (if you declare wages, pensions, pensions, property income for example and you simply need to deduct the most common expenses such as alimony) and the complete model (which is suitable for professionals with income from commercial or agricultural activity in particular).

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