Taxes 2023: When employees must file their own tax returns

Tax obligations are usually carried out by their employers on behalf of employees. They have until Wednesday, February 15. Find out if you forgot to submit any important receipts to your payroll accountant that could save you money. When you have to submit your tax return yourself, you will find out via the data field.

Tax obligations are usually performed by the employer on behalf of the employee. It is enough to sign the taxpayer’s statement, which the employee receives from the calculation of the company’s payroll, and at the same time submit:

  • confirmation of deductible items – These include, for example, mortgage interest deductions, donations, deposits for life insurance, deposits for supplementary pension savings or additional pension insurance, union contributions and payment of exams confirming the results of further education.
  • certificate of taxable income from the previous companyif the employee changed jobs last year.

At the same time, it is possible to deduct from tax:

  • tuition fees paid, which for 2022 is in the maximum amount of 16,200 crowns per year. A certificate from the kindergarten is sufficient.
  • discount for a child, which amounts to 15,204 kroner for one child, 22,320 kroner for the second child and 27,840 kroner for the third and each subsequent child. For older children, it is necessary to provide proof of schooling.
  • spouse discount in the amount of 24,840 crowns if the partner’s income is less than 68,000 crowns per year. It is supported by an affidavit.
  • tax discount for ZTP/P card holders in the amount of 16,140 crowns, disability allowance in the amount of 2,520 crowns or extended disability allowance in the amount of 5,040 crowns.

“The result of the annual calculation is always an overpayment, or zero. It is paid with the March salary at the latest,” says Jana Jáčová, founder of the accounting firm UOL Účetnictví.

He reminds that the employee cannot claim any expenses against the income from the dependent activity. You cannot reduce them by a loss from other tax bases either. “Therefore, if, for example, he runs a business in addition to his job and has made a loss in his business, he cannot deduct it from the tax base on income from employment,” reminds Jáčová.

When do employees file their own tax returns?

However, employees can also decide to submit their tax returns voluntarily. Maybe because they don’t want the company’s accountant looking into the family finances. However, there are much more frequent situations in which the employee has to file the tax return himself by law. This is if:

  • work for two or more employers at the same time.
  • they earn extra money through business, renting or have royalties, for example, from artistic activities and have an income of more than six thousand crowns per year.
  • have other occasional income according to Article 10 of the Income Tax Act over 30,000 kroner.
  • last year they stopped with pension or life insurance, for which they used tax reliefs in previous years, and therefore it is necessary to obtain earlier tax reliefs.
  • have traded securities or have profits from securities abroad or have transacted with cryptocurrencies, such as exchanges for other cryptocurrencies or NFTs, commodity exchanges.

Employees who are required to file a tax return must ask their employer for a certificate of taxable income from a dependent activity, which they need to fill out the tax form.

“There are several changes to the 2022 tax return that taxpayers should be aware of,” says Monika Lodrová, tax advisor at BDO.

The basic discount per taxpayer has been increased from 27,840 to 30,840 crowns. In connection with the increase in the average salary, there was also an increase in the limit of the total tax base for the application of a higher tax rate – to 23 percent, from 1,701,168 to 1,867,728 crowns.

Otherwise, the same items can be deducted and the same discounts that taxpayers typically give to a company’s payroll accountants can be used. “It should be noted that in connection with the conflict in Ukraine, the upper limit of the deduction of donations made by a natural person has been increased to 30 percent of the total tax base,” adds Lodrova.

The big change in this year’s taxes is the mandatory data box. From the new year, the Ministry of Labor and Social Affairs determines them for all natural persons of entrepreneurs. All self-employed persons, as well as employees who have a secondary activity in addition to their employment relationship, must submit tax returns electronically this year.

“As soon as a person has access to a legally established data box, he will have the obligation to submit forms to the tax administrator, for example tax returns, only electronically in the format and structure prescribed by the tax administrator. However, he does not necessarily have to use a data box for that, he can submit them, for example, through the portal of the tax administration,” explains Gabriela Ivanco from Mazars.

He adds that if the mailbox is not yet active at the time of submission, the return can be submitted in paper form.

For natural persons who are not entrepreneurs, the data box will, as before, be based exclusively on their request. Therefore, people who are not self-employed and do not have a data box or do not want to set one up, file their tax returns as before.

The form can be filled out on the website of the financial administration or it is available in every tax administration in paper form, and then delivered to the tax administration in person or by post. This year no later than 04/03/2023.

Another option is to submit a tax return electronically through the Internet Tax Administration, for example through a bank identity or the online tax calculator Aktuálně.cz. The result is a PDF file with filled data for download. You can print it, sign it and deliver it in person or by post to the tax administration, or you can submit it electronically (data box, electronic signature).

In the case of electronic submission, the deadline for submission is extended by one month until May 2, 2023. Exceptions are tax advisor applications that have a submission deadline of July 3, 2023.

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