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Deduction at source: the neutral rate, a bad choice?

You can modify the rates of the levy release to your employer until 15 September. But beware of surprises. As the $ 37.4 million tax households, you received a

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Deduction at source: the neutral rate, a bad choice?

You can modify the rates of the levy release to your employer until 15 September. But beware of surprises.

As the $ 37.4 million tax households, you received a few weeks ago, your notice of tax 2018 on your income in 2017. If you've examined in detail, you are aware of your rate of deduction at source custom (mentioned in page 4) that has been calculated by the tax administration according to the total income of your household.

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Specifically, if you are an employee(e), this rate will soon be sent to your employer (1), which may risk to give him ideas on the income of your spouse if you are subject to taxation in common (married or partner) or on income from which you may benefit elsewhere : property income from the leasing of one or more immovable properties, income from financial wealth, but also income, other than salary from the creation of a company...

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Preserve the confidentiality of your tax situation

In fact, you will be able to change the rate until December 15. However, your business will have potentially had knowledge as of September 15. For it is not so, or rather to preserve the confidentiality of such tax information (especially if you have the intention to ask for an increase...), you have the possibility to choose what is called a rate non-personalized or neutral rate.

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what is it exactly ? A rate defined by the tax administration for a single person, without children. This rate is for example equal to 0% when the net monthly wage taxable does not exceed 1367 € (for the city), but it is 9% for monthly salary taxable between 2512 and € 2725 €, 20% for a monthly salary taxable located between 5889 € 7581 € and so on, up to 43%. In the first case, the amount of tax on the income that will be withdrawn each month, will be located between 226 € 245 € ; in the second case, it will oscillate between 1177 and € 1516 €.

An option that should be handled with caution

Attractive in appearance, this option for the neutral rate, however, should "be more thoughtful" according to Catherine Costa, director of the centre assets Solutions at Natixis Wealth Management. Why? Because, by definition, the neutral rate does not take into account the quotient conjugal and family which you can benefit if you are married, and especially if you have more children to support. "Therefore, the neutral rate may be systematically higher than your rates custom : you pay more tax than necessary and even if the tax administration will refund this overpayment, you will need to wait until the year N + 1 to see it concretely," says Catherine Costa.

LAST MINUTE >> of deduction at source: there are two important changes

(1) so it is Best to opt for individualization of the rate or the non-transmission rate before 15 September.

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A "good deal" that may not be a...

Another assumption which can also be problematic : where the neutral rate, in contrast, leads you to pay less tax than the rate custom. In this case, the point of "good deal" contrary to what one might think at first. In fact, here you must readjust yourself for your income tax by logging on to impots.gouv.fr and you'll have only one month to carry out this step. Worse : if you decide to "forget" to pay what you owe, you will be liable to a surcharge of 10% on the supplement that the tax administration will not be received in time. For Catherine Costa "this provision provided for by the regulations may be the subject of further information, or even exceptional tolerance next year, but there is nothing, for the time being of the affirmed".

(1) so it is Best to opt for individualization of the rate or the non-transmission rate before 15 September.

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