December advance payment for income tax - how not to pay it?


Until January 20, 2014, taxpayers are required to settle the last income tax advance payment for 2013. However, they can avoid this necessity by submitting an annual tax return summarizing the previous year by that date.

For the second time, entrepreneurs, instead of paying a double advance in December (for November), can make an advance payment for December until January 20, 2014. Importantly, however, they can also completely avoid the obligation to pay it by submitting the annual declaration earlier. Instead of waiting with the annual declaration until the last minute, i.e. the end of April 2014, you can settle accounts with the tax office in January.

December advance tax payment and submission of the declaration in January

Not. As 2012 was the first year in which the obligation to pay a double advance was abolished (i.e. previously it was twice the value of the advance payment for November, payable until December 20 in favor of the lack of advance payment for December), numerous interpretative doubts arose.Some came to the conclusion that in order to avoid paying the advance payment for December, it is enough to submit the annual tax return to the office in January and pay the tax due on the 30 April deadline. Nothing could be further from the truth ... The bold conclusions were curtailed in February 2013 by the Director of the Tax Chamber in Łódź, issuing an individual interpretation (IPTPB1 / 415-682 / 12-2 / MAP), which indicated:

“Taking into account the future event presented in the application and the above-mentioned provisions of tax law, it should be stated that the Applicant, in order not to be subject to the obligation to make an advance payment for the fourth quarter of 2012, should, in accordance with Art. 44 sec. 6 of the Personal Income Tax Act, submit a tax return and pay the tax resulting from this declaration by January 21, 2013. The above-mentioned conditions should be met jointly. At the same time, it should be added that the wording >> will pay the tax on the terms specified in Art. 4 << does not mean that Art. 45 of the Personal Income Tax Act and the tax resulting from the return submitted by 21 January 2013 will be payable by 30 April 2013. "

This means that in order to avoid paying the advance payment for December until January 20, 2014, you must submit an annual PIT and pay the tax due to the budget at the same time.

What are the advantages of submitting the annual declaration by January 20, 2014?

A faster filing of your annual return can benefit from savings. Such a procedure is especially profitable for taxpayers who obtain high income from their activities (exceeding the first tax threshold), and at the same time are married in which the partner has low or no income. When it is possible to make a joint annual settlement of the spouses, submitting PIT by January 20 may bring savings by reducing taxable income to the first tax threshold. This will take place when half of the total income of the spouses is lower than PLN 85,528 (the tax rate will then be 18%). In such a situation, the tax due from the annual settlement may be lower than the one calculated as the advance tax for December from the economic activity itself.

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Submitting the tax return earlier than April 2014 also benefits taxpayers who generated tax overpayment during the year. Faster submission of the annual declaration means faster tax return to the taxpayer's account.

Another advantage is the possibility of using tax reliefs in the annual tax return, which may reduce the tax due. The entrepreneur does not reduce the periodic advance payment by deductible allowances.

The last issue is the inventory difference. If the value of the final inventory is lower than the value of the initial inventory, the calculated income is decreased by the difference resulting from the comparison of inventories. However, if the situation is reversed, i.e. the final inventory exceeds the value of the initial inventory, it should be remembered that the difference increases the income, and therefore will also increase the tax.

When is it not worth submitting a PIT summary declaration in January?