How to get a tax deduction through your employer

Types of tax deductions that can be obtained from an employer

Receiving deductions through the employer, and not through the tax office, only changes the form of payments, but not their purpose or size.

Accordingly, through your place of work you can receive the following deductions:

Social deduction. If the employee has a need for personal treatment, or a tax deduction for treatment through the employer is necessary for relatives. Social deductions also include payments for education or raising a child
Property. Tax deduction when purchasing an apartment through an employer, other real estate or cars
Standard deduction. Obtained if there is a benefit (war veterans, Chernobyl liquidators, guardians, etc.)
Professional deduction. Suitable for categories of citizens working under a copyright agreement or for royalties.

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In a number of cases stipulated by the current legislation of the Russian Federation, citizens can apply for a social tax deduction. This preference allows you to reduce the income tax payable.

It is available only to personal income tax payers (13%) who are tax residents of the Russian Federation. The benefit is provided in the amount of expenses incurred by the taxpayer for certain purposes for a specific tax period, but subject to established restrictions.

The grounds and procedure for obtaining such a personal income tax deduction are regulated by Article 219 of the Tax Code of the Russian Federation (TC).

Social tax deductions from the employer: advantages and disadvantages

The main difference in receiving social deductions through the tax service and through an employer is that the tax service provides a deduction in the form of a fixed amount for taxes already paid to the budget.

In the case of an employer, compensation is provided for future payments. After the employee applies, the employer relieves him of the need to pay 13% (income tax) monthly to the budget.

Important : Even if you file deductions through your employer, contacts with the tax office cannot be avoided. Every calendar year you will have to confirm the legal basis for receiving funds from the tax service.

The main advantage is that there is no need to wait until the end of the calendar year to apply for a deduction (as is the case with the tax office). Receipt of deductions occurs upon the occurrence of the right to a refund.

The disadvantage is the lack of opportunity to receive real funds. Those. If we are talking about deductions for treatment, it is more profitable to receive a fixed large amount from the tax office than to simply be content with an “increase” in salary of 13%.

But if we are talking about social deductions, for example, when raising children, an “addition” in the form of a tax benefit will be more appropriate than just the amount for the calendar year. It is also more profitable to receive tax benefits for future payments if you do not have official work experience (deductions through the tax office will compensate for the funds for the last 3 years). Those. At the beginning of your career, it is more profitable to file deductions through your employer than through the tax office.

In general, the advantages and disadvantages of each method are determined by the specific circumstances and current situation.

How to get a tax deduction at work?

Shouldn't I get a tax deduction at work?

What benefit could there be in this? Let's talk about the possibility of obtaining a tax deduction from the employer. About what benefits there may be and what possible disadvantages of this method of income tax refund.

Russian legislation makes it possible to choose the method of income tax refund. You can return your personal income tax through the tax service or receive a tax deduction through your employer.

Let's take a closer look at the features of the method of receiving a refund at work. What is the best way to do this, and does it make sense to use it?

Let's first determine what you can get a tax deduction for. You can exercise your right to an income tax refund in the following situations:

when purchasing or constructing real estate;
when applying for a mortgage loan;
during training or treatment, both for yourself and your immediate family;
if there are children.

There are others, but these are the most popular tax deductions.

How can you apply and receive the money you are entitled to? There are only two options:

you can return the entire amount at the end of the tax period, that is, the calendar year;
or, you can receive the deduction in parts, every month with the help of your employer.

As you can see, the fundamental difference lies precisely in whether the taxpayer receives his deduction in full or not. How does this work in practice?

Let's look at an example. A certain Frolov bought an apartment in 2020 and decided to exercise his right to a tax deduction. And now he has two options.

Firstly, our Frolov can wait until the new year 2020, fill out a 3-NDFL declaration and go to the tax office with all the documents. After verification by the inspector, the entire awarded amount will be transferred to his personal account in one payment. And here this story ends.

There is a second option. Let’s say Frolov doesn’t want to wait for the New Year holidays, well, that’s his right. And immediately after the sale and purchase transaction is completed, Frolov collects the same documents for the purchase of an apartment, with the exception of the declaration. And as in the previous version, it goes to the tax office.

And within a month he receives, no, not money, but a notice of the right to a tax deduction indicating the amount awarded to him. With this notification, he goes to work and there writes an application for a tax deduction. And from this moment on, Comrade Frolov stops paying personal income tax on his earnings.

So, it turns out that in the first case the taxpayer pays personal income tax during the year, and at the end of it returns his money back. In the second case, he simply stops paying taxes to the state.

In order to return income tax through the employer, and through the tax office, you will also have to work hard and collect a package of necessary documents.

Let's consider a scheme for obtaining a tax deduction at the place of work. We collect all standard documents, except for the 3-NDFL declaration and 2-NDFL certificate.

Next, we submit a package of documents to the tax office. A month later we receive from the inspectorate a notice of the right to deduct. We go with him to work, where we write a statement that we want to receive a deduction. And after that, we stop paying income taxes on earnings until the awarded deduction accumulates. This occurs from the month in which the application was submitted to the accounting department of the enterprise.

As you can see, you need to visit the tax office at least twice to take a package of documents, and then pick up the notice a month later. Then what are the advantages of this method of returning personal income tax? Or maybe there are some other disadvantages? Let's understand further.

The main advantage of a refund from an employer is that it increases your monthly income without putting in almost any additional effort. After completing the documents, you will officially receive a full salary without any deductions.

By the way, let's do the math. Remember that our Frolov bought an apartment in 2020? Let this happen in April. He immediately collected all the documents and took them to the tax office. A month later, he came to the accounting department of his company with a notice from the tax office and wrote an application for a tax deduction. And this happened in May.

How do I get the standard child tax credit?

How to get a tax deduction when buying an apartment is more profitable, read here.

How to get a tax deduction for education, read the link:

Let Frolov’s salary be 30 thousand rubles. And monthly income tax of 13% of this amount is withheld from him, that is, 3,900 rubles. Every month our hero receives 26,100 rubles.

And now, after writing an application, starting from May, Frolov will receive a tidy sum of 30 thousand rubles. This is his net salary.

Thus, his additional income for the year will be 27,300 rubles, that is, his income tax, which he could pay for the next seven months from May to December.

The benefits are obvious. There is no need to wait until the new calendar year to get your money back. You can start preparing documents immediately after a situation arises in which you have received the right to a deduction. For example, immediately after buying an apartment.

Another advantage is that the list of documents that must be submitted to the tax authorities is reduced. If you plan to receive a tax deduction from your employer, you do not need to fill out a 3-NDFL declaration, and you also don’t need a 2-NDFL certificate from the company’s accounting department.

Now let's talk about the disadvantages.

If you do not want to advertise the purchase of a new apartment, then you definitely do not need to submit documents for a return to the accounting department. After all, this news will immediately become known to all employees of the enterprise.

But if this is not a secret, then let's continue the conversation. Sometimes you may notice that less money is coming back at work. This is especially true in cases where, for example, the apartment was not purchased at the very beginning of the year.

Let's look at our previous example, but only now we will return the money through the tax office.

Let's say our Frolov decided to wait a little while receiving the money and return the entire amount for 2020 at once - in a single payment. Therefore, I went to the tax office at the beginning of 2020. And in this case, he was able to receive a refund of 46,800 rubles, that is, all the income tax that was withheld from him over the past year.

Remember the previous example? Then our Frolov’s income from his employer was only 27,300 rubles - only for the seven months that passed after he submitted his documents. The difference is obvious. And it amounts to 19,500 rubles.

It turns out that getting a deduction at work is unprofitable?

Not really. Our friend and comrade Frolov can receive an amount of 27,300 rubles through his employer. And at the beginning of 2020, submit documents for the past year again, but this time in full, including the 3-NDFL declaration. And after that he will be returned the due 19,500 rubles.

Let's continue. In what cases can you avoid visiting the tax office again? It is best to do this at the very beginning of the new year, so that you have time to bring all the documents to your accountant in January or early February.

Let's continue with our example. Having become a little richer in 2020, Frolov, who had already received the first part of the property deduction, decided to continue returning the personal income tax and receive a 100% refund in 2020 only at work.

That is why at the very beginning of the year he brought confirmation from the tax office that he had the right to a refund for the purchase of an apartment. And since January, the accounting department has not withheld income tax from Frolov.

Is there a benefit? Perhaps yes. If Frolov’s salary remains the same, 30 thousand rubles, then the monthly income of 3,900 rubles will result in 46,800 rubles over the year. Frolov could have received the same amount after the end of the year by contacting the tax office in 2017. In this case, he would receive his income tax withheld during 2016 in a single payment.

As you can see, everything is ambiguous, and each situation must be considered separately.

It is also necessary to remember one more feature of the return of personal income tax from the employer. Permission from the tax office to deduct is given only for one year. If during the current year you did not manage to accumulate the full amount of the deduction and have the right to transfer the balance to the next period, you will have to go through the entire registration procedure again in the new year.

In what cases can you apply for a deduction to your employer?

We looked at examples where a tax deduction was provided for the purchase of housing. This deduction is called a property deduction. And it is provided not only in the case of purchasing an apartment or room, but also a house, and even a plot of land for construction.

But in addition to income tax refund for the purchase of real estate, you can contact your employer to receive other types of deductions:

this may be a social deduction if, for example, Frolov had a need to pay for education or treatment of both his own and his immediate relatives;
standard deduction, which is provided in case of having children in care, or awarding preferential categories, such as a veteran of the Great Patriotic War, a Chernobyl survivor, and a number of others;
professional tax deduction if Frolov provides services under a civil contract or receives fees for creating works of art.

As you can see, this list includes most situations where a tax deduction is generally provided.

And a few more life questions. How many jobs can you get a deduction? After all, there are cases when a person works several jobs. Accordingly, income tax is withheld from his salary. And a logical question arises: is it possible to return personal income tax from different employers?

Since January 1, 2014, this possibility has been spelled out in the Tax Code. So now you can work part-time in different places, receive a deduction notice and not pay taxes within the confirmed amount. The only thing you need to remember when receiving a notification from the tax inspector is to write a statement about what job and what amount of deduction you need to provide.

There are other situations when, for example, our Frolov received a property deduction at his work from May, and in September he unexpectedly decided to change his place of work. Can he continue to benefit from the tax benefit in his new venture?

There is no clear answer to this question yet. And the tax office will most likely offer to wait until the end of the calendar year, and then issue a new notification for the next year, where the new employer will already be indicated.

Let's summarize. Registration of a tax deduction from an employer has both pros and cons. And only you can decide which return method is best to choose:

through the tax service with a slight time delay, but you will immediately receive a significant amount in your hands;
or through an employer. Almost immediately after the right to a tax benefit arises, but with small monthly increases in salary.

The most important thing is that this choice exists. This means you can choose the best option for yourself.

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Procedure for filing deductions at the place of work

To receive payments, you must provide certain documents for tax deduction to the employer. Below we will look at the registration procedure step by step.

Step 1: collecting documents proving the right to a tax refund

The list of certificates provided to the employer does not differ significantly from the package of documents for the tax office. The main difference is that there is no need to fill out the 3-NDFL form. You must also submit an application to your employer for a tax deduction. It has a standard format, and an example of how to fill it out can be found in the accounting department at your place of work.

Step 2: Submit an application to your local tax authority

The application is submitted to the local tax office at the place of actual residence. According to Article 220 of the NKRF, tax authorities have 30 days to process documents. After this, the applicant receives either confirmation of the right to compensation for tax deductions or a refusal.

The application can be submitted either by mail or in person. At the same time, the second method has a higher priority, because allows you to verify on site that all documents are collected in the correct form. When applying via mail, there is a risk that the package of documents will be returned for revision, and this significantly slows down the registration process.

Step 3: Contact your employer for compensation

Having a notice of the right to deductions in hand, it should be handed over to the place of work. The application is submitted to the accounting department along with the application for deductions. Calculation of payments is the task of the employer. At the same time, the company is obliged to count wages without tax deductions starting from the month in which the notice was submitted. You can receive an “increased” salary either until the end of the tax deduction or until the end of the calendar year.

Deadlines for receiving the deduction

The main topic that needs to be dealt with is how long it takes to return a tax deduction in various situations. Cases involving transactions involving pensioners, as well as when purchasing real estate using mortgage funds, require special consideration. The deadline for receiving a tax deduction when purchasing an apartment with a mortgage is not established by law - the process of returning funds can be initiated at any time after receiving a certificate of registration of property rights; there are absolutely no restrictions.

The period for receiving a tax deduction when purchasing an apartment by a pensioner is three years . Only those pensioners who purchased an apartment immediately after retirement can take advantage of this opportunity. The fact is that pensioners in Russia are not subject to income tax, so three years after a person retires, he will no longer be able to return the part of the taxes paid that is allowed by the state.

More information about how income tax is refunded when a pensioner purchases an apartment can be found in this article https://realtyinfo.online/7207-osobennosti-vozvrata-podohodnogo-naloga-pri-pokupke-kvartiry-pensionerom

The period for returning personal income tax when purchasing an apartment in all other cases is also three years . This means that it is necessary to begin collecting documents for transfer to the tax authority no later than three years after the state registration of the real estate acquisition transaction. Otherwise, the deduction will not be available.

Can an employer refund taxes for previous months?

Based on the examples described above, it becomes clear that in order to return payments already made, you should contact the tax service. But since 2017, the government has changed its strategy on this issue. Now, the employer can return taxes paid since the beginning of the year. In fact, problems may arise with accounting, because... “fresh” innovations are not immediately integrated into practical application. Therefore, a higher priority way to return funds for the past months is to contact the tax office using Form 3-NDFL.

Important: in the case where deductions were determined for the current calendar year, but were not exhausted, you have the right to demand payments from the employer for the next year. In this case, you will have to contact the tax office for notification that you can receive unexhausted payments in the next calendar year.

How to receive deductions if you have several jobs

Having multiple jobs makes it puzzling when it comes to getting deductions. Previously (before 2014), an employee had the opportunity to receive deductions for only one place of work. This situation was not fair enough, because a person paid taxes on all income, but could only partially compensate for them.

In 2014, amendments were made to the tax legislation. Thanks to them, the employee has the opportunity to receive deductions for all places of work at the same time. This norm is enshrined in the Tax Code (Article 220, paragraph 8).

This can only be done through the tax service. If you apply, you should indicate that you want to divide the deduction between all places of work. The task of tax officials is to notify employers about the availability of tax benefits.