As the end of the year approaches, an often forgotten but nevertheless crucial tax procedure can save you from very unpleasant surprises for next year’s taxes.
For many taxpayers, autumn is often synonymous with tax catch-up, with additional income tax to be paid. And this despite the implementation of withholding tax, a mechanism which aimed, among other things, to limit the tax balances to be paid at the end of the year. This scenario often concerns people whose salary has increased since their last tax return, and who have not thought about adjusting their withholding tax rate.
However, many taxpayers, whose income has nevertheless remained strictly the same, also experience this misfortune and find themselves facing additional tax to pay which can reach several hundred, or even several thousand, euros. In question, a very simple tax procedure, which must be carried out before mid-December, but which is very often forgotten: the adjustment of the advance on reductions and tax credits.
Every year, millions of taxpayers, including you, benefit from a deduction or refund on their taxes. Many expenses in fact give entitlement to a reduction or an income tax credit: employment of an employee at home, childcare costs for young children, donations to associations, union contributions or even rental investments. There are multiple cases and many people are affected.
Once a reduction or tax credit has been granted, the tax administration then pays each year, in January, an advance corresponding to 60% amounts obtained the previous year. This is a valuable financial help for many households, but this boost can also backfire. Because if they stopped the expenses giving entitlement to these tax advantages, but they still received the advance, they are then exposed to a significant tax catch-up.
For example, the tax credit for child care expenses only applies to children aged under 6 on 1er January of the tax year. Thus, if you benefited from this tax advantage in 2024, the administration will then pay you 60% of its amount in January 2025. But if your offspring turned 6 years old in 2024, you are no longer entitled to this credit tax, and the tax authorities will then demand its refund from you in the fall of 2025.
This principle applies to all cases of reductions or tax credits giving entitlement to a 60% advance at the start of the year, such as donations to associations or work from home. So, to avoid unpleasant tax surprises next year, you have until December 12, 2024 to adjust or cancel the amount of the advance which will be paid in January 2025. This process is simply carried out from your personal space on impots.gouv.fr, in the “Manage my withholding tax” section, then in the “menu”. Manage your advances on reductions and tax credits.