Reports of additional income tax deductions and request for adjustment in the fiscal year-end

The employer as withholding agent is obliged to perform the adjustment of fiscal year-end. To this end, the employee may make the disclosures to report additional income or require further tax deductions such as those for the rent, for the large family, or the child support.

The employees, as taxpayers income earners, they are obliged to pay tax personal income tax and additional regional and municipal authorities as a result of income received. The tax laws with respect to taxes on income includes a number of tax concessions granted to taxpayers. They range from deductible from income tax deductions, it is a number of possibilities for the reduction of taxes payable, tax deductions in payroll. The year-end tax adjustment made mandatory by the employer then has an opportunity to make the final calculation of taxes due and also an opportunity to recover a tax credit as a result of deductible expenses and tax deductions.

In the case of employees, or even the case of pensioners, so the balance fiscal year-end is the first of the two possibilities that the taxpayer has to make the final calculation of the tax due, which will then be paid to the tax authorities by the employer . But it is also the first opportunity to recover the tax credits that may arise from deductible expenses and tax deductions. The second possibility is for the following year from May onwards and through the submission of the tax return, with the possibility to opt for the 730 or the Model Law.

The need to request the employer. The employer as withholding agent has the obligation to make monthly in the Book only in the payroll, all withholding taxes required by law. And to do that applies the tax deductions for income from employment. For the application of other deductions, the most important of which is that for dependent family members, spouse and dependents dependent children, it is necessary that the worker carries out an annual communication to the employer.

Requests for fiscal adjustment. The employer must also be informed of other tax deductions and all the elements, such as the income from, due to the worker to make a correct and precise calculation of the adjustment to fiscal year-end. The employee must provide the request and must do so especially if you have other income or if he has the opportunity to benefit from tax cuts, always with the aim to have a proper taxation year-end and in the payroll of the year, thus avoiding of having to cover the balance of their tax position in the statement of income generating heavy taxes on their person or in settlement claims that in reality would be recoverable directly from the payroll.

The model annual deductions for family. The worker until the entry into force of the Decree Law no. 70 of 2001, had an annual obligation of the employer to submit the model for annual tax deductions. With the entry into force of Legislative L. n. 70 of 2011 was amended art. 23, paragraph 2, letter a) of Presidential Decree 600 of 1973 and it was determined that the request for the application of deductions cover only those relating to dependents, pursuant to art. 12 of the Tax Code. Is eliminated the annual submission of the request for deductions for employee income. The employer will have to apply deductions for employee automatically. The employee must send the model no longer annually but only when there are any changes such as the birth of a child.

 

Requests for additional tax deductions

In addition the model for annual deductions, in cases where you need to send it as we have seen, in the calculation of the adjustment to fiscal year-end, the worker has the right to communicate to the employer any other items needed to calculate. And for some guidance can mean all the tax deductions or tax breaks that affect the calculation of taxes due, as we have previously seen. We see the increasing demands that the worker can do for proper operation of adjustment fiscal year-end (and a correct calculation of taxes during the year).

The Finance Act of 2008 (Law no. 247/2007) extended to all types of tax deductions the principle that the withholding tax must be recognized, provided that the employees so request. So the worker once the request is entitled to receive from the withholding tax, the employer, the calculation of the adjustment to fiscal year-end, taking into account all the additional income tax deductions and communicated.

The most important requests or communications that the employee must provide the employer are as follows:

- Request for guaranteed minimum deduction for income not exceeding € 8,000 per year;

- Request for deduction in respect of rents;

- Request for deduction or credit for larger families;

- Request for deduction for alimony paid to a former spouse;

- Inquiry on the application of the substitute tax on premiums and payments of productivity.

 

Claim for deduction guaranteed minimum

It 'a request that applies to all employees (or quasi-employees, project workers) that do not reach the 8,000 euro of income from employment during the tax year. Article. 13 paragraph 1 letter a) of the Tax Code provides that for the total income does not exceed € 8,000 per annum, deductions for employee due can not be less than 690 euro for the relationships of indefinite duration and peri € 1,380 fixed-term positions.

The cases are for example: a ratio of part-time work or employment contracts less than one year, that is, the worker hired during the year or the employee who has resigned or been fired during the year. In any case, this is all workers with total income less than 8000 euro.

The deduction for employment does not vary as a function of the total income but according to the days of duration of the employment relationship. But in case of income of less than € 8,000 deduction minimum, as we have seen is 690 euro or 1,380. So even if the deduction for employee calculated on the basis of working days is less, it must be brought to tax deduction that amount.

The circular 15 / E Revenue Agency has stated that this minimum size must be applied from the first pay period (ie from the first paycheck) if the employee claims not to have other income and employer withholding assumed that the employee until the end of the year will not exceed 8,000 euro of income (for example, the case of a worker employed in October, for example).

In the event that the employer has not applied the minimum deduction, the employee may make a request. Or in the case of other income may, on the contrary, report to have more income and then ask not to use the minimum deduction of withholding tax by the employer.

 

The deduction for the lease

The budget of 2008, as we have seen, has extended the possibilities to request deductions from the worker. Among the demands of the deduction is for the management of deductions on rents, governed by. 16 of the Tax Code. An employee who is the holder of a lease of real estate units can then ask the employer to apply its tax deduction.

The deduction for the lease, that it is only for properties used as a principal residence, is expected in four types:

- The deduction for lease rent-free;

- The deduction for the leases so-called conventional;

- The deduction for lease contracts entered into by young people from 20 to 30 years;

- The deduction for employees who transfer their residence for work purposes.

 

The deductions listed above (for which we refer to deepening the deductions for lease payments) can not be combined with each other, then the taxpayer must choose the most favorable in the case of possession of the requirements for more than one of the deductions. In its communication to the employer for the calculation of the adjustment taking into account the tax deduction for the rent paid, the employee shall indicate details of registration of the lease, the months in which the property was used as a principal residence and the non-possession of other income. The withholding agent has received the request, apply the tax deduction on rents in the calculation of taxes due and then conguagliate in the envelope of December.

Quote incapiente. In the event that there is an amount in excess of the deduction due to a worker who has exceeded the limit of upstream considered available in the month of adjustment (ie have already been written off taxes due in that month), the employer must report the CUD the amount is not attributed to the employee so that the employee can then recover at the time of submission of the tax return (using Form 730 or Model Act) tax deductions for rental fees not conguagliate.

 

The deduction for families

With the 2008 financial introduces a new tax deduction in addition to the tax deduction for dependent children, for families. The deduction to parents who have dependents for tax purposes at least four children. For fiscally responsible means children who have an income of less than € 2,840.51. In this case it is a deduction for families equal to 1,200 Euros per year. This deduction is regardless of income. For more information, refer to deepening the tax deduction for families.

The worker to get the deduction of € 1,200 will have to submit an annual declaration to their employer withholding agent, who will then proceed to apply the tax deduction in each pay period, reducing the deductions, the tax personal income tax, that the worker is required to pay. When the adjustment tax, the employer must take into account the deduction due to the employee and recalculate the tax deduction used also by determining the possible tax credit.

Credit as an additional deduction for families. This is the case in which the employer, by applying the tax deduction of € 1,200 withholding due by the employee for the employee, finds himself with a share of the tax deduction is not used. That is the tax income tax you have to pay the employee is less than € 1,200. The difference is transformed into a tax credit that should be used in compensation. For more information see the tax credit for families.

 

Periodic maintenance checks received by the former spouse

In the case of separation or divorce on the basis of a judgment of the court, the two ex-spouses enjoy some tax benefits provided by the IRS for the plight of the family unit as a result of the division between husband and wife or between the two parents. The spouse who pays the child support has the right to retract checks among expenses deductible from income. In practice, the benefits provided will reduce his total income on which to calculate the taxes, personal income tax on all. For further details, see the child support deductible.

The spouse who receives the checks instead of periodic maintenance by the former spouse is entitled to take advantage of the tax deduction provided for in paragraph 5-bis of art. 13 of the Tax Code. This provision allows the earner spouse enjoy the same tax deductions provided for retirees with less than 75 years, the deductions for retirement income.

The non-cumulation and choice. The particularity of this provision in favor of the spouse recipient of the check is that this tax deduction can not be combined with other deductions laid down in Article forever. 13 of the Tax Code. And the most important deduction can not be combined with that required for the spouse recipient of the check is just the tax deduction for income from employment. The law raises the earner spouse of checks, but who is the holder of income from employment, faced with a choice: either take advantage of the tax deduction for income from employment or benefit from the tax deduction for the spouse recipient of periodic payments. This deduction is from a figure of € 1,725 per annum in the event of a total income of less than € 7,500 to zero over € 55,000 of income. It will be necessary for the recipient spouse an assessment between the two tax deductions.

The communication for the balance fiscal year-end. The employer that provides an income from employment provides office to apply the tax deduction for income from employment. So the employee who is also the recipient of a periodic maintenance checks by the former spouse, and assesses how convenient option for the tax deduction for the spouse earner of checks, must notify the employer for the proper calculation of the fiscal year-end adjustment.

 

The communication of additional income earned in the year

Article. 23comma 4 of Presidential Decree 600 of 1973 provides that for the purposes of carrying out operations at year-end balance of the employee can ask your employer withholding tax, by 12 January of the year following the year in which the income of working employee or similar were perceived, to take account also of other income from employment and similar perceived in the course of previous employment entertained during the year (it is an example of a part-time worker who is or has been other part-time or a worker who has received other income from previous contracts, fixed-term or indefinite).

Cud delivery model. The request must be made through the submission of the certificate (the model Cud) where data are summarized all prior or contemporaneous other working relationships that produce or have produced an increase in income that should be considered in the calculation of final taxes and deductions.

More contracts with the same employer. If the worker has carried out several contracts of employment with the same employer, such as more fixed-term contracts or contracts of more project work, will not have to file a report. The employer must combine the income earned by the employee during the year and can automatically make adjustment operations in the month of December.

Two part-time contracts. One of the cases where it is very convenient for the worker to report an additional income to their employer is certainly one in which the owner of two part-time employment contracts with two different companies. There is a risk of having to pay substantial taxes to balance (personal income tax and Additional) during the presentation of the income.

In this case, in fact, the single withholding agent acts independently with reference to the employment income of the individual contract of part-time work under its jurisdiction, entered into with the employee. It follows that they will be considered for each individual applying a second income, but with reference to an income lower than cumulative. While the progressivity of tax personal income tax, the tax payable increases with income. Motivation is a combination of two incomes, which should be considered in their totality. This then generates a net increase Irpef than held back by two employers in the monthly payroll and year-end tax adjustment.

To avoid this situation, the worker must then communicate to one of the two employers the income received by the second part-time contract with another employer, ensure that an in payroll taxation, and at year end the balance tax, taking as reference the two incomes combined into a single higher income, the income of the worker as a taxpayer.

18/12/2011

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Translated via software

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Source:

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