Income tax: reducing your withholding tax will be easier in 2023!

The income tax is still a tax that deducts part of the salary and the income that added to social security contributions. But unlike social security contributions, which represent still within 22%income tax varies it. Furthermore, it seemed that a new scale was being proposed to be consistent with inflation. In this way, the tax brackets are larger. But since it is still possible to elect a monthly tax withholding, it is possible vary this amount. And recently, the conditions for modifying it seem to be simplified. We will explain everything here.

Inflation and income tax

Thus, the income tax is based on the income to know how much percent the latter will rise. So, if you are in the first section, you will not have any tax, for the second, it rises to 11%, then to 30% and finally to 41% and 45%. Therefore, you may choose to take tax withholding. In fact, it is the annual income that determines how much percent will be deducted. So, each month, you can decide that we take a sum from you.

Then, around the month of April, you have to make your income statement for the last year. After which the DGFiP will check to send you your tax notice in August. There is also a window to make changes if necessary. In fact, very often households forget to register the tax deductions to which they are entitled. Once the modifications are completed, at the end of the year, the DGFiP gives the rate to regularize or not.

In fact, if your income has decreased during the year, for example, then the withholding tax may be too high. Thus, at the end of the year, the DGFiP returns the overpayment. In the opposite case, you have not paid the full tax on income So in this case, you will have three months before the new year to regularize. And if the calculations are correct, there may also be nothing to return or give.

an adjustable rate

Therefore, if you see in the year that you are losing income, it is still possible to modify the withholding tax rate. But for that, there are conditions. In fact, the the change is still greater than 10%. Thus, for the monthly direct debit to change, your income must are 10% below the minimum, per year compared to previous annual income. So much had to be lost. But with all that, without losing even 10%, even if the overpayment is paid back at the end of the year, it can be difficult.

Indeed, paying a large sum each month, and which cannot be modified, because you haven’t lost enough, then the end of the month can get complex quickly. It is then aware of this problem that this 10% rule tends to be modified. allowing homes stay as good as possible relative to your income.

a new scale

However, if the income tax can present a concern in case of loss of income, in case of an increase as well. As has been said. There are several tax brackets. These brackets take into account annual income. But now, with inflation, life has changed. And it costs much more. Almost 8% more for the food sector. But therefore, to help the French, the government has implemented the law of Purchasing Power.

In the latter there are many aids, bonuses, bonuses and above all revaluations. So that sounds great for beneficiaries, but less so when you think about taxes. In fact, with all this additional help, the annual income changes a lot. Only, between tax brackets, the rates change a lot. For one euro more, you can spend without taxes, at 11%. But also, from 11% to 30%, which is huge. Thus, for having earned one more euro, you could have to pay almost three times more taxes. From 3,000 euros to 9,000 euros. An impossible change for many homes.

the new cuts

Therefore, the government has decided to review the scale for income tax. The bands and thresholds are wider to avoid these scenarios. Thus, for this year, below 10,225 euros, there were no taxes. For next year it will be for less than 10,777 euros. Next, there is a tax of 11% between 10,226 euros and 26,070 euros For the following year, the section is between 10,777 euros and 27,478 euros. Then the 30% tax goes from a slice of 26,071 euros to 74,545 euros, to 27,478 to 78,570 euros.

This change in the tax scale thus allows many households not to change their tax bracket. Y so don’t raise your taxes. This measure thus involves a reduction in taxes.

The change in income tax

Thus, for the remainder of the monthly income tax collection, a drop of more than 10% was needed between the old annual income and the new one. And that brings very little flexibility. In concrete terms, then it is necessary for a person who withdraws 500 euros a year to go to 450 euros. But between the two no room for maneuver. But that could change very soon.

So it is the finance bill for 2023 that the government wants this rule to change. If the basic 10% seemed to avoid multiplying the number of change requests, the measure seems to have to go down anyway. Thus, the government intends go from 10% to 5%. A way to better adapt personal income tax to households.

Thus, households will be able to more easily adapt the monthly installment of this tax in the event of a drop in income. It also explains “This measure will have the effect of expanding the scope of taxpayers who can benefitupon request, of a downward modulation of the rate of withholding on account”.

For the process, everything happens online. Just go to “Manage my tax withholding” after “Update after an increase or decrease in your income”. You will still need some proof, such as a net estimate of taxable income.

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