In matters of income tax, taxpayers’ declarations are presumed to be accurate and sincere. It is up to the administration to control its content. In this context, if any income declaration is likely to be checked, certain inconsistencies will certainly earn you a reminder from the tax authorities.
1 – Forgetting to declare your rent
An all-too-frequent omission. Rents from the rental of real estate, whatever it may be, are subject to income tax. They must be declared when making the overall income declaration.
Today, the administration can easily have knowledge of the real estate held by a person. from two real estate properties, the question of the absence of rents in the income declaration may arise, without necessarily constituting an anomaly (case of a secondary residence for example).
Be particularly careful if you request a Pinel tax reduction! This system involves the rental of accommodation and therefore, a priori, the collection of rent. Declaring one without the other is a glaring inconsistency.
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2 – Forget your furniture rentals
Still in the rental sector, this time furniture. Failing to report income earned through rental platforms can be costly.
Airbnb, Booking and the others have the obligation to transmit to the administration the number of nights spent through them as well as the amount collected. The General Directorate of Public Finances (DGFiP) reminds you of this in the income declaration. Armed with this information, the tax authorities can easily catch up with those who fail to declare, in the interests of tax justice for those who respect the rules.
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3 – Combine alimony and child support
When you attach a dependent child, you obtain an advantage in the form of an increase in the number of tax shares (0.5 for the first two then 1 share for the following). Your taxable income is divided by the number of shares, the attachment of a child allows you, constant income, to pay less tax.
However, this advantage is intended to be exhaustive. You cannot deduct, in addition, the alimony paid to the same child. This is a common and visible error, which will undoubtedly draw the attention of the tax authorities to your file.
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4 – Make a mistake about the flat-rate deduction on dividends
If you receive dividends, they are subject to a single flat tax of 30%. In detail, 12.8% for income tax and 17.2% for social security contributions. In box 2CK of the income declaration, you must enter the amount of lump sum deduction already towards on your dividends. This is the amount of income tax, only, that is to say the 12.8%… and not the whole 30%!
This error (declaring the 30% levied instead of the 12.8% income tax) results in a generous restitution of your profit but also a gross anomaly which will not escape the tax authorities, by simple comparison with the amount of dividends.
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5 – Abuse tax credits
The income declaration is also an opportunity to declare certain expenses giving rise to a tax credit and therefore to be reimbursed. It is therefore a position that is closely watched by the tax authorities, who will not fail to check your file if you declare significant amounts.
In particular, expenses disproportionate to declared income and/or relating to little-used devices will certainly result in a tax audit.
What is the risk if you are at fault?
If the right to error exists for taxpayers in good faith, the tax authorities are not kind to those whose errors or omissions significantly impact the calculation of tax. If deliberate breaches can be characterized, the increase incurred is 40%.
Taxes: these 10 common mistakes to avoid for your income tax return