Income tax is key for both employers and employees. From the first, he requires a competent and timely process of accrual, accounting and payment. And for the second, it is considered a phenomenon that reduces honestly earned income. An important role is played by tax for the state. This is because it occupies a large part in the structure of the financial budget. To simplify the severity of income taxation for the working population, the law provides in certain cases to make a tax deduction for personal income tax.
The value of personal income tax
PIT is a tax withholding on all income and earnings received in the territory of the Russian Federation. The standard income tax rate is 13%. The amount calculated from this total gross earnings is calculated and paid by employers.
For the purposes of taxation, personal income tax is taken on the income received both in cash and in kind. The latter are converted into money by determining the market value at the time the amount of the fee is charged.
Other rates are provided by tax law.
- This is 35% of cash prizes and winnings.
- This is 30% of income received in Russia by non-residents.
- This is 15% of dividends received by citizens who are not residents of the Russian Federation.
- Also 9% of dividends received by citizens of the Russian Federation.
As a social policy in the field of income taxation, the state provides benefits in the form of determining the list of income from which deductions are not made.
- State benefits, in particular financial assistance for children.
- Pensions and social benefits.
- Compensation payments approved by law.
Of particular importance in determining personal income tax benefits are various tax deductions.
The concept of tax deduction
The definition of income tax, the procedure for its calculation, accounting and payment are prescribed in the main legislative act. It regulates the tax policy of the state and is called the Tax Code of the Russian Federation. From its contents follows the concept of what a tax deduction is.
Income deductions relate to preferential measures of the state tax policy. The main purpose of their development is to reduce the burden of personal income tax due to the production of certain financial costs or due to specific social conditions.
In fact, the tax deduction is a state benefit established by applicable law and reducing the amount of income taxed by personal income tax. In other words, it expresses the size of the amount to be applied to the income tax rate, which will be deducted from the total income of the citizen.
Deduction Classification
The application of a certain tax deduction depends on the conditions established by a particular payer for legislation. The following types of tax deductions are distinguished.
- Standard. They apply to taxpayers themselves and their children.
- Social. They are aimed at alleviating the financial situation of citizens who have incurred expenses for charity, education or treatment.
- Propertyapplicable to taxpayers who have sold, purchased or built housing.
- Professional. They are aimed at certain categories of taxpayers.
The classification of deductions for personal income tax is carried out on several essential grounds.
- In the order of provision (upon filing a declaration or upon issuing earnings tax agent).
- In relation to income or expenses (non-taxable income, reimbursement of the established percentage of expenses or reduction of income by the amount of expenses).
Standard deductions
The deductions under consideration are applicable to the income of persons who are citizens of the Russian Federation and are taxable at a rate of 13%. Article 218 of the Tax Code provides a list of standard deductions and categories of citizens to which they apply.
- People affected by radiation or participating in the elimination of the effects of radiation, in particular Chernobyl, are given a tax deduction of 3,000 rubles;
- Workers with children. Then, for the first two children, 1,400 rubles are deducted, and for the third and subsequent kids, 3,000 rubles.
- Heroes and military personnel.
For standard deductions for children, there are limits on the amount of income per year. As a result, if the amount of earnings exceeds 280,000 rubles, then deductions for children cease. In calculation total income only taxed 13% is included.
Social Income Collection Benefits
Income taxed by personal income tax in the amount of 13% of the amount also provides benefits in the form of social deductions. They are executed only in the appropriate authority at the place of residence after the submission of the declaration. Reporting is submitted for the year in which social payments are made.
Tax legislation provides for the following social deductions for personal income tax.
- When paying for training.
- When paying for medicines and treatment.
- When financing your own pension.
- With charity payments.
Payment for education should be confirmed by an agreement with an educational institution and a unified payment document. You can get personal income compensation when you pay not only for your education, but also for the education of children and siblings. The limitation is the maximum deduction amount. It is equal to 120,000 rubles.
The tax deduction for treatment refers to the rarely demanded benefits of personal income tax. Nevertheless, each working citizen can receive compensation for the amount transferred by personal income tax.
Social benefits, with additional expenses for increasing the pension, are relied upon when paying non-state pension contributions. Additional contributions are also compensated, provided that they are aimed at a funded pension.
Charitable payments represent the amount of funds sent free of charge to support cultural, educational, religious and medical facilities. The deduction is made only for confirmed expenses incurred in cash.
Property tax deduction
Property deduction is directed to the amounts spent on the purchase or construction of housing. Only there is a restriction on its size. The deduction may not exceed 2,000,000 rubles.
The Tax Code of the Russian Federation also provides for personal income tax relief for the sale of own property in the form of real estate or a share in the authorized capital. In this case, the taxpayer must own the object of sale for less than three years, and its value should not exceed 1,000,000 rubles.
A tax deduction is not provided for by the relevant legislation when buying a car, despite the fact that the car certainly relates to property. The institution will not accept the amount of a car loan as expenses that fall under the personal income tax exemption.
Compensation of professional expenses
For certain categories of workers in the field of taxation, certain benefits are provided. First of all, these are professional deductions in calculating personal income tax. A characteristic feature of such compensation is the dependence of its size on expenses directly related to income from a specific professional activity.
The following persons are entitled to professional deductions.
- In the prescribed manner, registered as individual entrepreneurs, lawyers or notaries.
- Workers under a civil contract.
- Citizens who have received remuneration for the right of the author or inventor.
Social deduction calculation example
To correctly represent the principle of the action of social deductions, we consider a clear example of this process. For example, a parent paid for his child’s education:
- for 2012 - 35,000 rubles;
- for 2013 - 40,000 rubles;
- for 2014 - 45,000 rubles.
His salary amounted to:
- for 2012 - 144,000 rubles;
- for 2013 - 152,000 rubles;
- for 2014 - 113,000 rubles.
Due to the fact that the Tax Code of the Russian Federation allows compensation for tuition for a period not exceeding three years preceding the date of the report, you can summarize the payment for all three years, as a result of which the amount paid is 120,000 rubles.
The amount of personal income tax paid for these three years is 409,000 * 13% = 53,170 rubles. In this case, the deduction itself is determined in the amount of 13% of the tuition fee, it turns out 15,600 rubles. Accordingly, the state taxpayer will pay 37570 rubles.
Property deduction calculation example
Compensation has its own peculiarity of calculation. Consider the example of calculating the tax deduction for the cost of housing. In 2014, the family buys an apartment and pays 1,870,000 rubles under the contract for the transaction. Thus, taking into account that all documents confirming the fact of purchase and payment are provided, the tax deduction will be 1,870,000 * 13% = 243,100 rubles.
Compensation of personal income tax is carried out by calculating income tax on earnings in subsequent periods, the amount of which is not withheld, but paid to the taxpayer.
The provision of the benefits in question when calculating personal income tax is a special process in the tax system. The legislation establishes specific types of compensations and deductions provided to taxpayers in the amount of taxes paid to the budget and on the basis of specific conditions or incurring certain expenses. Any tax deduction is carried out strictly upon presentation of documents confirming the right to it.
