The 2023 annual individual income tax comprehensive income settlement is in progress, and if you have overpaid the tax due to insufficient deductions or failure to declare deductions, you can apply to the tax authorities for a tax refund during the annual tax settlement. Under what circumstances may a tax refund be generated? What are the precautions? We've sorted out 7 common tax refund scenarios.
Policy Essentials:
After the end of the year, residents need to summarize the income from wages and salaries, remuneration for labor services, author's remuneration and royalties obtained from January 1 to December 31, and the balance of the income after deducting expenses of 60,000 yuan and special deductions, special additional deductions and other deductions determined in accordance with the law shall be the taxable income.
The calculation formula is as follows: refundable or additional tax = [(comprehensive income - 60,000 yuan - special deductions such as "three insurances and one housing fund" - special additional deductions such as children's education - other deductions determined according to law - donation) ×applicable tax rate - quick deduction] - prepaid tax in the tax year.
Major pre-tax deductions
1. Deduction of 60,000 yuan, as well as special deductions such as social insurance premiums such as basic endowment insurance, basic medical insurance, unemployment insurance, and housing provident fund;
2. Eligible special additional deductions for infant and child care under the age of 3, children's education, continuing education, serious illness medical treatment, housing loan interest or housing rent, and support for the elderly;
3. Other deductions such as eligible enterprise annuity and occupational annuity, commercial health insurance, personal pension and so on;
4. Eligible donations to public welfare and charity.
Taxpayers who obtain comprehensive income and business income at the same time may declare the deduction of expenses of 60,000 yuan, special deductions, special additional deductions and other deductions determined in accordance with the law in the comprehensive income or business income, but shall not declare the deduction repeatedly.
Common tax refund scenarios
1. The annual comprehensive income in 2023 is less than 60,000 yuan, but the individual income tax has been prepaid.
[Example]: Xiao Liu will receive a salary of 10,000 yuan in January 2023. Individuals pay 2,000 yuan per month for "three insurances and one housing fund". There are no other deductions, and the individual income tax of 90 yuan has been prepaid. From February to December, the monthly salary is 4,000 yuan, and there is no need to pay individual income tax. The annual salary income is 54,000 yuan, no other income, and the individual income tax has been prepaid 90 yuan.
Withholding Tax:
(10000-5000-2000)×3%= 90 yuan
Tax Settlement:
The annual income does not exceed 60,000 yuan, the taxable income is 0, and the taxable amount is 0 yuan.
Tax refund: 90 RMB
2. In 2023, there is a special additional deduction that meets the conditions for enjoyment, but no deduction is declared when the tax is paid in advance.
[Example]: Xiao Sun will receive a monthly salary of 15,000 yuan in 2023, pay 2,000 yuan for "three insurances and one housing fund", and enjoy a total of 4,500 yuan of special additional deductions such as housing rent and supporting the elderly every month. In 2023, Xiao Sun will have a serious illness medical expense of 35,000 yuan borne by an eligible individual, and there will be no other deductions.
Withholding Tax:
(15000×12-5000×12-2000×12-4500×12)×10%-2520=1680元
Tax Settlement:
You can declare and deduct medical expenses for serious illnesses
35,000-15,000 = 20,000 yuan
(15000×12-60000-2000×12-4500×12-20000)×3%=660元
Tax refund: 1680-660=1020 yuan
[Tips]: Serious illness medical deduction standard: In a tax year, the part of the medical expenses related to the basic medical insurance incurred by the taxpayer, after deducting the medical insurance reimbursement (referring to the self-paid part within the scope of the medical insurance catalog) exceeding 15,000 yuan, shall be deducted by the taxpayer within the limit of 80,000 yuan when handling the annual final settlement.
3. Due to mid-year employment, retirement or lack of income in some months, the deduction of expenses of 60,000 yuan, special deductions such as "three insurances and one housing fund", special additional deductions such as children's education, enterprise (occupational) annuity, commercial health insurance, tax deferred endowment insurance, etc. are insufficient.
[Example]: A college student will graduate in June 2023 and join Company A in July, with a monthly salary of 15,000 yuan, an individual paying 2,000 yuan for "three insurances and one housing fund", and a total of 3,000 yuan per month for housing rent and special additional deductions for supporting the elderly. There are no other deductions.
Withholding Tax:
(15000×6-5000×6-2000×6-3000×6)×3%=900元
Tax Settlement:
(15000×6-60000-2000×6-3000×6)×3%=0元
Tax refund: 900-0=900 yuan
4. Those who do not hold an employment unit and only obtain income from labor remuneration, author's remuneration and royalties, and need to handle various pre-tax deductions through annual reconciliation.
[Example]: Xiao Zhang has no employment unit in 2023, provides one-year consulting services for Company A, and receives a monthly labor remuneration of 20,000 yuan, and Company A has withheld and prepaid personal income tax of 38,400 yuan. Xiao Zhang will pay 12,000 yuan of "three insurances and one housing fund" in 2023, and can enjoy a total of 18,000 yuan of special additional deductions for supporting the elderly, and none of the above deductions will be enjoyed in the middle of the year.
Withholding Tax:
Income from remuneration for labor services
20000×(1-20%)×20%×12=38400元
Tax Settlement:
[20000×12×(1-20%)-60000-12000-18000]×10%-2520=7680元
Tax refund: 38400-7680=30720 yuan
5. The withholding rate applicable to the taxpayer in the middle of the year is higher than the annual applicable tax rate of the annual comprehensive income when the taxpayer obtains remuneration for labor services, author's remuneration and royalties.
[Example]: Xiao Wu will receive a monthly salary of 15,000 yuan in 2023, pay 2,000 yuan for "three insurances and one housing fund", and enjoy a total of 2,500 yuan of special additional deductions such as housing loan interest and supporting the elderly every month, and there are no other deductions. In July 2023, Xiao Wu will receive 20,000 yuan in labor remuneration for teaching enterprises and pay 3,200 yuan in advance individual income tax.
Withholding Tax:
Income from wages and salaries
(15000×12-5000×12-2000×12-2500×12)×10%-2520=4080元
Income from remuneration for labor services
20000× (1-20%)×20%=3200元
Tax Settlement:
[15000×12+20000×(1-20%)-60000-2000×12-2500×12]×10%-2520=5680元
Tax refund: 4080 + 3200-5680 = 1600 yuan
6. There are eligible public welfare and charitable donation expenditures, but no deduction is made when the tax is paid in advance.
[Example]: Xiaotao will receive a monthly salary of 15,000 yuan in 2023, pay 2,000 yuan for "three insurances and one housing fund" personally, and enjoy a total of 2,500 yuan of special additional deductions such as housing loan interest and supporting the elderly every month, and there are no other deductions. In January 2023, Xiao Tao donated 5,000 yuan to a non-profit elderly service organization through the Red Cross, and the donation was not deducted when the unit withheld and prepaid that month.
Withholding Tax:
(15000×12-5000×12-2000×12-2500×12)×10%-2520=4080元
Tax Settlement:
(15000×12-60000-2000×12-2500×12-5000)×10%-2520=3580元
Tax refund: 4080-3580=500 yuan
[Tips]: Individuals who donate their income to public welfare charities such as education, poverty alleviation, and poverty relief, and the part of the donation amount that does not exceed 30% of the taxable income declared by the taxpayer can be deducted from the taxable income; Where the State Council stipulates that donations to public welfare and charitable undertakings shall be deducted in full before tax, follow those provisions. In this case, the "Cai Shui [2000] No. 97 stipulates that "donations to welfare and non-profit elderly service institutions through non-profit social groups and government departments shall be allowed to be fully deducted for social forces such as enterprises, public institutions, social groups and individuals, and before paying enterprise income tax and individual income tax." ”
7. If the tax rate of the year-end bonus is higher than the comprehensive income tax rate, and the full amount of the year-end bonus will not be increased after the comprehensive income is incorporated into the comprehensive income, the tax calculation method of the annual one-time bonus of the year-end bonus in the individual income tax settlement may be selected to be fully incorporated into the comprehensive income, and it may also be found that the tax payable is reduced, so as to obtain a tax refund.
[Example]: Xiao Huang will receive a monthly salary of 6,000 yuan in 2023, pay 1,200 yuan for "three insurances and one housing fund", and enjoy a total of 2,500 yuan of special additional deductions such as housing loan interest and supporting the elderly every month, with no other deductions. At the end of 2023, a year-end bonus of 50,000 yuan will be obtained, and the tax has been prepaid according to the annual one-time bonus tax calculation method of the year-end bonus.
Withholding Tax:
50,000×10%-210=4,790 yuan
Tax Settlement:
(6000×12-60000-1200×12-2500×12+50000)×3%=528元
Tax refund: 4790-528=4262 yuan
Source: China Tax News, Xiamen Tax. The content of this article is for general information purposes only and is not intended as formal auditor, accounting, tax or other advice, and we cannot guarantee that such information will remain accurate in the future. No person should act on the basis of the information contained herein without having due regard to the relevant circumstances and obtaining appropriate professional advice. The articles reproduced in this issue are for academic exchange purposes only. The original copyright of the article or material belongs to the original author or original copyright owner, and we respect copyright protection. If you have any questions, please contact us, thank you!