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

Income tax remains a tax that withholds part of the salary and the income that is added to the social security contributions. But not like to social security contributions that represent still within 22%income tax varies him. In addition, a new scale seemed to be proposed to keep in line with inflation. In this way, the tax brackets are larger. But since it is still possible to opt for a direct debit source monthly, it is possible to vary this amount. And recently, the conditions for changing it seem to have been simplified. We explain everything here.

Inflation and Income Tax

Thus, the income tax is based on the income to know how much percent the latter will increase. So if you are in the first tranche you don’t have to pay tax, for the second, it is 11%, then 30% and finally 41% and 45%. You can therefore choose to levy a withholding tax. After all, it is the annual income that determines the percentage that you will be deducted. So you can decide every month that we takes a sum.

In that case, you must file a tax return for the income of the past year around the month of April. The DGFiP then checks whether you receive your assessment notice in August. There is also a window to make changes if necessary. Very often households forget to register the tax deduction to which they are entitled. Once the changes are complete, at the end of the year, the DGFiP indicates the rate that should or should not be regularized.

For example, if your income has decreased in the course of the year, the withholding tax may be too high. For example, at the end of the year, the DGFiP returns the excess paid to you. Otherwise, you have not paid the full tax on income. In this case, you have three months before the new year to regularize. And if the calculations are correct, there can also be nothing to give back or to give.

An adjustable rate

So if you see in the year that you lose income, it is still possible to adjust the withholding tax rate. But there are conditions attached to it. In fact, the change remains greater than 10%. In order to have the monthly direct debit changed, your income must therefore be are 10% below the minimum, by the year compared to the previous annual income. So much had to be lost. But despite all that, without losing even 10%, even if the overpaid amount is refunded at the end of the year, it can be difficult.

Indeed, by pricking a large amount every month, and that cannot be changed, because you haven’t lost enough, then the end of the month can quickly get complex. It is therefore aware of this problem that this rule 10% then tends to change. allow households to remain as good as possible in relation to their income.

A new scale

However, if income tax can be a concern in the event of loss of income, also in the event of an increase. As has been said. There are different tax brackets. These tranches take into account the annual income. But now, with inflation, life has changed. And it costs much more. Almost 8% more for the food sector. But that’s why the government has introduced the Purchasing Power Act to help the French.

In the latter there are many tools, bonuses, surcharges and especially revaluations. So it sounds great for the beneficiaries, but less so when you think about taxes. After all, with all these extra resources, the annual income changes significantly. Only between the tax brackets do the rates change significantly. For one euro more you can pass through without tax, at 11 o’clock%. But also, from 11% to 30%, which is huge. So to earn an extra dollar, you may have to pay almost three times more tax. From 3,000 euros to 9,000 euros. An impossible change for many households.

The new slices

The government has therefore decided to review the income tax scale. The tires and thresholds are wider to avoid these scenarios. So for this year, under 10,225 euros, there were no taxes. For next year that is less than 10,777 euros. Next one, a tax of 11% takes place between 10,226 euros and 26,070 euros. For the following year, the tranche will remain 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.

Due to this change in the tax scale, many households are therefore unable to change their tax bracket. And so don’t raise their taxes. This measure therefore passes for a reduction in taxes.

The Income Tax Change

So for what’s left of the monthly income tax deduction, a reduction of more than 10% between the old Annual sales and the new one. And that entails little flexibility. In concrete terms, it is then necessary that a person who withdraws 500 euros per year goes to 450 euros. But between the two no play area. But that could change very soon.

It is therefore the financing proposal for 2023 that the government wants to see this rule changed. If the base 10% seemed to avoid a multiplication of the number of change requests, the measure seems to have to fall after all. This is how the government wants go from 10% to 5%. A way to better tailor income tax to households.

This makes it easier for households to adjust the monthly levy of this tax in the event of a drop in income. He also explains “This measure has the effect of extending the scope of taxpayers who can benefit from it, on requesta downward adjustment of their withholding tax rate”.

Everything for the process is done online. Just go to “Manage my withholding tax” thereafter “Update in response to an increase or decrease in your income”. You still need some proof like an estimate after deduction of taxable income.