Phew! You have just completed your tax return. Now you want to understand how much you pay, and when. However, deduction at source and advances on tax credits complicate the situation… What you need to examine, at the end of the declaration, to understand the details of your income tax.
The tax adapts to your life. This is the promise of withholding tax: income tax becomes simpler. At least its mode of collection… Indeed, as the levy is monthly and proportional to your income, the puncture is more diffused and makes it possible to avoid the unpleasant surprise of the autumn invoice by receiving the tax notice.
This simplification opens up another headache for those who want to understand the details of their tax balance payable following the declaration. Indeed, it is only now, through this 2023 declaration, that the tax authorities calculate the final tax to be paid on your 2022 income. A scholarly calculation which must take into account what you have already paid at source in 2022 , but also the advance on tax credits and reductions paid to 9 million tax households last January. The General Directorate of Public Finance (DGFiP) details this three-cushion table at the end of the statement. Text explanation.
Estimate of your net tax after tax credits
You are at stage 4 of the online declaration: summary and signature, just before closing the annual chore: under the summary of all declared income for 2022, the Public Treasury provides you with an estimate of your income tax. This net tax corresponds to the amount that you used to see, in the past, before the reform of the tax at source, in force since January 2018. This is what the tax authorities claim from you, overall, in respect of of your 2022 income. A positive amount… or negative through tax credits.
Under the estimate of your net tax to be regularized in 2023 for 2022 income is either an amount which must be reimbursed to you by the tax authorities, or a balance which you must pay.
Case 1: Amount that will be refunded
Whatever your situation and the amount of your net tax, it is possible that the tax authorities will announce a refund.
It is possible if you are non-taxable and benefit from tax credits. It is also possible if you are taxable! Logic: you have advanced money to the public treasury in 2022 thanks to the withholding tax, it is possible that the adjustment of the final tax results in a refund of overpayment. The amount (indicated in positive) opposite this line represents a refund in your favour: the Public Treasury must make a transfer to your bank account at the end of July or the beginning of August 2023.
Property tax, income tax… All the dates not to forget in 2023
Case 2: Remaining amount paid
If you discover an amount remaining to be paid under the line dedicated to net tax, it means that the taxman did not take enough money from you over the months in 2022.
You still have a balance to adjust: the Public Treasury will claim it from you this summer following receipt of the 2023 tax notice.
The detail of the calculation
You do not understand the amount of the balance you have to pay, or the amount that the tax authorities will refund you? You can click on the detailed calculation link just under this amount. A window opens… Mental math challenge!
Tax before tax credits
Under the classic reminder your declaration is not finished – since you still have to sign it – is the detail of the calculation of the income tax. The tax line before tax credits corresponds to your income tax subject to the scale: this is the strict application of the progressive scale to your resources in 2022, depending on the composition of your tax household. An amount that also incorporates the possible discount, a mechanism to reduce or cancel the tax for low-income taxpayers, as well as tax reductions.
tax credits
This is the sum of all your tax credits. As a reminder, unlike reductions, which only reduce a possible tax, tax credits are due to you in all cases. If their amount exceeds that of the tax before tax credits, the tax authorities will pay you money for the year 2022.
Net tax
You find here theoretically the same amount as the net tax at the end of the declaration. This is the amount of tax for 2023 on income for 2022 excluding withholding tax. In short: your annual tax. Which can be zero (0) if you are non-taxable, negative thanks to tax credits, or positive.
Advance received on tax reductions and credits in 2022
If you are one of the 9 million tax households usually receiving tax credits or reductions, then you probably received an advance from the tax authorities last January. The Public Treasury obviously takes this boost into account to calculate the balance you still have to pay, or not. Please note that the wording of the tax authorities is ambiguous: the amount entered here is in advance received in mid-January 2023, an advance calculated on the basis of your credits and reductions received in 2022 (therefore your income and expenses in 2021).
Withheld the source already paid
The tax authorities remind you here, to the nearest euro, of what it levied over the whole of 2022 in respect of withholding tax. These sums are already settled: you will not pay them a second time!
Withholding tax deposit already paid
This is the monthly or quarterly installment paid by self-employed workers or taxpayers earning property income. Just like the amounts indicated on the withholding tax line, these sums are already settled: you will not pay them a second time!
Namely: in some cases, the DGFiP also details a dedicated line for the advance payment of social security contributions already paid. In this case, PS designates the social security contributions and IR the income tax installment.
Amount remaining to be paid or amount to be refunded
It’s time to get out your calculator:
Net tax + advance – withholding tax =
The result of this equation gives you the amount shown on the next line. If the result is positive, this is the amount remaining to be paid: your tax balance to be adjusted in the summer of 2023. If the result of your equation is negative, this is the amount that will be reimbursed at the end of July.
Beware of the misunderstanding: what you will receive or have to pay this summer is clearly the line amount that will be reimbursed or amount remaining to be paid and not the income tax line.
The DGFiP also recalls, in this detailed calculation, your reference tax income (RFR) and the number of units in your household.
The example of a couple on the edge of the tax
Below is the detail of the calculation for a couple with two children. The incomes of both adults are high enough to fall within the scope of the progressive scale of income tax (tax before tax credits in the photo below: +500).
They benefit from a tax credit for childcare expenses (tax credits: -1000). Under the 2023 d tax on 2022 income, this couple must therefore receive 500 from the tax authorities (net tax).
This couple, not withdrawn at source in 2022, received a advance on their usual tax credits, of 150, last January. The tax authorities take into account this amount already paid and will only refund them the difference: 350 (amount which will be reimbursed).
Example (bis) of a pair taken at the source
And if this same couple had been taken from the source? Complicate the calculation with a withholding already pays of 600.
- Tax before tax credits: 500
- Tax credits: 1000
- Net tax: -500
- Advance received on reductions and tax credits: 150
- Source deduction already paid: 600
- Amount to be reimbursed: 950
Take back the calculator:
Net tax (-500) + advance (150) – withholding tax (600) = -950
The result is negative: the DGFiP will therefore pay 950 (amount which will be reimbursed) to this couple at the end of July 2023.
Tax notice: the keys to understanding your tax balance