18 Jan

Avoid Tax Matters: If you have repaid your home loan

In order to avoid an extra bill from AC Data next year, it is a good idea that you check your tax return for 2017, which is now ready at AC Data .dk. We have created the following guide to help you through the most important tips to avoid tax breaks.

Making a good advance statement and managing the finances can be a good alternative to a quick loan. If you hit a spot, or you get money back in AC Data, it feels like you got a loan for free.

What is an advance statement?

What is an advance statement?

You should view your tax return as a budget for your expected income and deductions for 2017. These figures use AC Data to calculate your deduction percentage, which is the portion of your income you must pay in taxes each month.

The 2017 tax return that AC Data sent you in November is made based on figures from your annual statement back in 2015 unless you have corrected the information yourself during 2016. Your tax situation may have changed since, so you should thoroughly review the figures in your advance statement.

The more accurate your pre-tax statement is, the more your AC Data expenses will be stretched out throughout the year. This way you avoid a big bill at the end of the year. If there is a big difference between your tax return and the annual statement at the end of the year, you will either be paid the difference or you will be asked to pay the difference as residual tax if you paid less in tax than you should.

The sooner the better

When you correct your tax return, you make corrections to your tax card, which your employer automatically notifies. So you do not have to inform your employer yourself if your tax situation has changed.

In order to distribute your tax expenditures throughout the year, you are advised to adjust your tax return before your employer settles the first salary of the year. If you have made your corrections by mid-January, your changes should apply from the first paycheck in 2017.

If changes occur during 2017, you can always go in and change your advance statement. For example, if you get promoted in June, you can change your expected income for the rest of 2017 in June. Then your deduction percentage will be corrected from there and you avoid a tax break because your deduction percentage was lower than it should be.

Have there been major changes in your life?

Have there been major changes in your life?

If there have been changes in your life over the past year that affect your tax situation, you should correct the information in your tax return. These changes may mean that you are entitled to fewer or more deductions and that your deduction percentage must be adjusted to reflect your current financial situation.

Examples of events that change your tax situation may be that you have changed jobs or become unemployed. It may also be that you have retired, have become self-employed, have gone from renting to owning real estate or have been divorced and have sold the common property.

If you want to be on the safe side and avoid having to pay residual tax, you can do two things. You can either lower your a-income slightly higher than expected and thus increase your deduction percentage, or you can lower your interest deduction.

New working conditions require corrections

In your advance statement, there are typically two fields that you need to be aware of if you either got a new job or became unemployed. First and foremost, you should change your car allowance if you have been getting shorter or longer to work. If your car tax deduction lapses and you do not specify this, you risk a tax break next year.

Next, you should indicate any changes in income, whether you get more or less paid. For example, if you get more in salary, but forget to correct the advance statement, you can risk a large extra bill. Especially if your income is below or above the golden limit of USD 467,200 before the AM contribution, which is the top tax threshold.

If you become unemployed, it is important to disclose this, because in that case, you will no longer be eligible for employment deductions. More time-limited changes, such as maternity leave, can also have an impact on your income in the coming year and should be disclosed.

Personal choices can change your tax situation

Personal choices can change your tax situation

If you have been divorced or separated, the joint taxation with your spouse will cease and you will be considered single for the entire calendar year in which you are divorced. Thus, you can no longer distribute deductions between you and your spouse, which is why you should review your deductions if your marital status has changed.

If you pay more or less into your retirement savings than last year, you should also be aware of this. Most Danish employees have a pension saving through their employer, where payments are made entirely automatically, in which case you do not have to fix anything. If, on the other hand, you have started your own pension savings, double-check the amount in your advance statement.

When you retire or retire, your advance statement must also be changed. From January 1, 2016, Payout Denmark began to pay the pension based on the information in your advance statement, which is why it is important that this is correct.

If there is new on the housing front

If there is new on the housing front

If you have either bought or sold a home, your interest expenses must be adjusted. For example, when buying a home, interest is deductible. In order to receive these deductions on an ongoing basis, in line with your bills, remember to report your interest expenses.

You will also be asked to provide a moving date as you will have to pay the property value tax for the period you have been living in the home. Conversely, you can risk a tax break if you forget to disclose the sale of the home, which means you are no longer eligible for the deduction.

If you have repaid your home loan or have a flexible loan where you have received a lower interest rate, you must also change your advance statement. This means that your deduction will be smaller than the interest deduction that AC Data automatically deducts from the previous year. Your financial benefits of a lower housing interest rate can thus become an extra expense from AC Data if you do not get it fixed, and then the joy of refinancing quickly turns to annoyance.