Averaging applications to the tax authorities

Miscellaneous stupidfart9876 August 8, 2016 1 1
People with fluctuating income could save money by averaging. As a result, the income of three fiscal years are added together and divided by three. The tax will be based on average income. In the Netherlands we have a progressive tax system. This allows people with higher incomes pay more tax. If you have a higher income in a given year, for example, a golden handshake, you may have to pay tax for that year into a higher tax bracket. In that case, you can go by averaging spread the extra revenue over three years, making the tax burden is lower. Workers who switch from a full-time job to a part-time job can also save money by averaging request to the Tax Authority.

Progressive taxation

This method of taxation pay the people with the highest income the most tax. The lowest incomes to approximately ?? 18 000, - gross per year, have completed pay 34 percent tax. As income increases to be paid on the excess a higher tax rate. On the excess above the 54 000 ?? the highest charge must be paid, with 52 percent.

How does mediation?

In a given year, go for instance. The first two years you earned gross per year ?? 12500. In the third year you are going to work full time and receive income ?? 20,000. In the third year you were by your increased income partly in the 41% tax bracket up, while in previous years the 34 percent drive. By averaging request you will receive an average gross annual income of ?? 15,000. This takes you charge the third year in the lower tax bracket. The tax authorities will now determine how much taxes and premiums you paid really, and this will compare them with how much you should pay after averaging. Overpaid taxes and contributions will be returned.

What are the conditions for averaging?

You can only funds over three consecutive years, and those years should not be considered in a previous averaging. You must claim within three years after receipt of the final stop on the last year of the three that are involved in the averaging. The averaging only covers the income in one box. A negative income can not be accounted for, you should go out in the year zero. ?? The first 545 of the refund after mediation you do not get paid. This is to ensure that it receives requests in which the benefits are small.

Temporarily higher or lower income

Due to various reasons, you might receive a fluctuating income. The moment you substantially more or less going to work, you may request mediation. In case you're fired and you will receive a golden handshake from your employer, the amount is recognized as income in the year of receipt. By means you can receive back large sums.

How do I submit the application?

The Tax will not go point to the possibility to resources. You must take action by sending a letter to load unit which you are subject. The letter should explain what you want and you need to add a calculation. The calculation shall prove that you are entitled to a refund. Keep in mind that you provide your Social security number in the letter.