The annual income limit, which affects the income tax rate, is being exceeded by one in four employees, the tax administration warns. In addition to the income limit, it encourages checking the changes in deductions brought about by the corona situation.
Teleworking can either lead to bumps or entitle you to additional deductions.
1. Tax rate for inspection
If the tax rate is too low, earnings for the rest of the year will be taxed at the higher additional rate. The estimate of the number of employees is based on the assumption that their income will remain the same until the end of the year.
The tax administration encourages the employee to make a change tax card immediately if necessary.
In September, the taxpayer will send text messages to six thousand employees whose tax card income limit is being significantly exceeded.
2. Unemployed or laid off, check benefits
Those who have become unemployed and laid off should also check the annual income limit, if they have not already done so.
Earnings-related daily allowance, basic daily allowance and labor market support are reported on the tax card as benefits, not as wage income.
According to the tax administration, the tax rate does not always decrease, although income often decreases. The reason may be, for example, that benefits cannot be deducted for tax purposes in the same way as wage income.
If the unemployed or laid off person does not make a new tax card, the payer of the benefit withholds 20-50% of the benefit.
3. Beware of stumps for travel expenses
The corona situation may have brought changes to the deductions on the tax card due to increasing teleworking. Therefore, especially travel expenses should also be checked.
Many employees have far fewer trips between home and work than last year. If the travel tax deductions are recorded on the current tax card according to the trips made last year, it is worth updating the situation, the tax administration will instruct.
If you normally travel a long way to work, have stayed telecommuting and do not correct the information on your tax card, you can get considerable chicks next year, Senior Inspector Päivi Ylitalo warns in a tax administration release.
For example, in the Helsinki metropolitan area, the situation has little effect on the reduction of public travel expenses.
4. Take advantage of deductions
Reducing the costs of teleworking in taxation is of great interest to people because of the exceptional year.
The tax administration points out that, from 13 August, the cost of face masks used between home and work can be reduced under certain conditions as travel expenses for tax purposes.
Popular tax deductions also include the household deduction.
For this year, you can already report the household deduction, travel expenses, income acquisition expenses, work housing deduction and maintenance obligation deduction. The reduction will benefit as early as this year when it is reported to the tax card and the tax rate is reduced.
All deductions can already be reported to the tax card. Then the data will be ready with next spring’s pre-filled tax return. The data must be announced next spring at the latest.
Instructions for deductions can be found at Vero.fi.
5. Tips for making a change tax card
Make changes to the tax card, preferably in the electronic service OmaVero.
To do this, book an estimate of income for the full year, income and taxes accrued since the beginning of the year, and information on any deductions.
Use a tax rate calculator to check the income limit of your tax card.
If you are unable to use OmaVero, ask for help from the chat service or national service numbers found on the taxpayer’s website.