While many French taxpayers were pleasantly surprised to receive a refund from the tax authorities at the end of July, others risk having a more difficult return to school with an unexpected levy.
As the school year begins and millions of French taxpayers return from vacation, they will receive news that could take them by surprise. While some will be lucky enough to see a transfer from the tax authorities credit their bank account in July, nearly 10 million households will have a much less pleasant surprise. Indeed, the tax authorities have just finalized the calculations and adjustments for the past year, revealing that many taxpayers have not paid enough taxes in 2023. Result: a balance to be paid, sometimes in several installments, starting this fall.
But why is such an adjustment necessary? In large part, it stems from the nature of the withholding tax system, introduced in January 2019. This system, which deducts tax directly from a taxpayer’s salary or pension, is based on a rate estimated from the taxpayer’s situation at a specific point in the year. However, life changes, and with it, income. A change of job, a promotion or additional unreported income can throw this initial calculation out of balance, sometimes leaving a balance owing to the tax authorities.
And this regularization may not be insignificant, since the amount to be paid is estimated at 2,127 euros on average: a sum that can weigh heavily on the budget of some families, especially when returning from vacation, when they have to deal with the many back-to-school expenses, particularly school fees!
For affected taxpayers, it is important not to panic. The tax authorities often offer staggered payment solutions for large amounts, in order to ease the financial burden. Moreover, this situation is not necessarily a sign of an error, but rather a normal adjustment of taxation based on changes in personal and professional circumstances.
In addition, there are ways to limit this kind of inconvenience. It is recommended to regularly adjust your withholding tax rate. This can be done simply online, via the personal space on the tax website. If your income increases, for example after a promotion or a change of job, it is advisable to update your information without delay to adjust the withholding tax rate accordingly. This allows you to smooth out the payment of tax over the year, rather than ending up with higher withholding taxes in the last few months.
So, to avoid ruining your return to school, take a few minutes this summer to check if everything is in order with your withholding tax. This will avoid starting the fall with an unpleasant surprise!