The interest and taxpayers to absorb the operation of income tax, first to understand why they pay them and then control how they are calculated to alleviate them. The various references to calculate the income tax is essentially the net taxable income, by tax and tax brackets subject to respective rates.

To receive the discounts allowed on the income tax, it is especially important to understand the tax process and to know all the deductions if possible. The income tax is calculated according to an established order and its reduction is set by different case statements which are divided into two sets: either to increase the deductible expenses to reduce taxable income, either directly reduce the net Tax payable by tax cuts or tax credits.


Calculation of net taxable income

Each taxpayer must make an annual declaration of income. The various allowances, called aggregate gross income, include: wage income cut of 10% or actual costs, benefits other (commercial, non commercial, industrial, agricultural) income property (land and income from capital) , pension annuities and pensions, etc.. At the aggregate gross income, subtract any deductible expenses include: deficits (professionals, land, ) support the elderly, the compensatory allowance, social contributions, alimony, This result, called total net income, is then the amount of net taxable income.

The net taxable income specified above will still be subject to the number of shares in the tax household. The tax share is simply the number of dependents in the existing tax household. This notion of tax household was indeed established that the tax liability is fair to all taxpayers. The tax unit is subjected to a single tax and represented by a single taxpayer. Consequently, the income tax depends on the situation of each household: single, married, widowed or divorced and the number of dependents such as children, the elderly, etc. Thus, the tax base is equal to the quotient of all household income tax on the estimated number of units and is also called quotient familial.

Determination of gross tax

The calculation of the gross tax depends mainly on the number of shares in the household tax and net taxable income. The calculation of the gross tax is slice by slice. The tax base will be determined soon and distributed into 5 slices, each interval being subjected to a progressive marginal tax rates, which are respectively 0% [0 € – € 5 614], 5.5% [€ 5 615 – € 11 198] 14% [€ 11,199 – € 24 872] 30% [€ 24,873 – € 66 679], and 40% for taxable income in excess of € 66 679. We should not mislead you into believing that your income is subject to a single marginal rate. Whatever the amount of net taxable income, all units are concerned, of course up to the amount withheld.

Recall that the tax base previously determined amount is only for one part. Thus, after submitting to the various tax brackets, the result will again be weighted by the same number of shares and so we obtain the amount of the gross tax. And the gross tax of not more than € 828 will be deducted the discount. This is actually to subtract the amount of the gross tax, the difference between the half of it and € 431. This result means the right way or the net tax owing. Thus, for amounts not covered by the discount, the right way is equal to its gross tax calculated above.

Count of tax cuts and tax credits

Tax cuts and tax credits are subtracted directly from the net tax owing, which differ from the deductible expenses deducted on income. Regardless of the marginal tax bracket explained above, the tax reductions are similar for all. The tax cuts include social actions such as donations and grants, the cost of dependent people (elderly, child care and education of a child under 7 years), survival pension, savings, disability, or professional actions as work at home, capital subscription of SMEs, investment in overseas territories, corporate sponsorship, union dues, etc. While the tax credits relate to the work in the residence, the purchase of a vehicle, the loan interest or principal residence of the tax credit investment, financial, etc.. Note that if the amount of net tax payable is less than the tax cuts or tax credits, the only difference would be refunded by the Treasury in the case of the tax credit.

Thus, it is recommended that low-income taxpayers to make tax credits and tax cuts. By cons, those with higher incomes will have to act on the taxable income that is to say increase the allowable deductible expenses.