13 deductions to check out before the filing deadline on May 2nd
Filing tips for the filing deadline. Many people get stressed out about the tax filing date on May 2nd. Accountor’s tax experts have prepared tips on deductions to check out, which can impact your final tax.
1. Deductions for work tools, such as a mobile phone
If your employer does not pay for a work tool that you feel you need to be able to do your job, such as a mobile phone, you can make a deduction in your tax return if you buy it yourself.
One of the prerequisites for deductions, however, is that the work tool is necessary for the job. In this case, higher requirements are set than if the employer had instead purchased the tool. Among other things, it is required that the tool is of material significance for you to be able to do your job. In a tax context, this is a degree difference to the disadvantage of the individual for the individual’s own purchase.
If the circumstances for deduction are met, you can make a direct deduction for the purchase expense, on condition that it does not exceed one half price base amount (SEK 22,750 for the 2018 income year).
If the purchase expense is higher, a deduction can instead be granted through annual wear deductions based on the tool’s estimated useful life, such as 20% with five-year depreciation.
Is the useful life three years instead, the purchase expense may be deducted directly even if it is higher than one half base amount.
2. Remember the congestion tax for the travel deduction
If you have paid congestion tax for your own car related to the 2018 income year and also meet the rules for deductions for trips to and from the workplace, you can make a deduction for the congestion tax. You can make deductions for the part of your total expenses for travel and congestion tax that exceed SEK 11,000.
However, you cannot make deductions if you have a company car and had to pay congestion tax in cash or through net salary deductions. Here, the employer should have instead reduced the car benefit value by the amount you paid.
3. Car benefit upon a change of employer
If you drive at least 30,000 kilometres on the job in one year, a change of employers may mean that you do not drive the full number of kilometres at each employer, but that you do so in total during the calendar year. Each employer has then reported the full benefit value on the statements of earnings and benefits.
In such a case, you can claim an adjustment of the total benefit value by 75%. You make this request under other disclosures on the tax return.
4. Severance pay – how to lower the tax
Anyone who received income in 2018 related to several years, such as severance pay, can – under certain circumstances – lower their tax. This is if the rules for accumulated income are applicable in the case in question.
Besides severance pay, these provisions also apply, for example, to damages, royalties, retroactive pension and money from profit-sharing funds and insurance compensation. The rules can also apply to capital gains from the sale of shares, and then for the part of the profit taxed under the income type of employment.
Regular capital gains cannot, however, be distributed over the years.
The accumulated income must amount to at least SEK 50,000 and the total annual income must exceed the breaking point (SEK 468,700 in 2018) for state tax by at least this amount.
Provide justification under other disclosures on your tax return, which is why the income is accumulated. The Swedish Tax Agency then calculates the tax in both the regular way and according to the rules for accumulated income. The tax is then taken out according to the calculation that is most beneficial for you.
5. Pension savings – if you do not have the right to pension at your employer
The general deduction for private pension savings was repealed a few years ago. However, anyone who does not have a right to pension in his or her employment may still make pension savings deductions in an amount of 35% of his or her employment income.
The deduction is maximised to 10 price base amounts. This means deductions of at most SEK 455,000 for the 2018 income year.
6. Rental income – how to report it
Remember to report any rental income you have received if you rented out your home. In checks in earlier years, the Swedish Tax Agency discovered that there is extensive ignorance about how the rules work when it comes to this.
If you rented out a villa or leisure home, you may make a standard deduction of SEK 40,000. You may also make a deduction in an amount of 20% of the rental income. This means that rental income of up to SEK 50,000 is tax free.
If it is instead an apartment or tenant owner’s right apartment that has been rented out, you may make a deduction of SEK 40,000 and an amount corresponding to the rent or monthly fee for the part rented out.
When renting out to one’s own or a relative’s employer, you may, however, only make deductions for the actual additional costs due the renting. These can – in the view of the Swedish Tax Agency – be calculated to approximately SEK 1,000-3,000 during the year.
7. Deductions for improvement expenses possible without receipts
Upon the sale of a property, deductions for improvement expenses on the property can also be granted even if documentation in the form of receipts is missing. Then it is required that you can credibly establish that you had the cost, such as through photos, building permits, construction loans, property declarations or the name of the craftsman that did the work.
Keep in mind that if you received a ROT deduction for an improvement, you may deduct the amount you paid to the person doing the work as an improvement expense. You are accordingly not entitled to make a deduction for the part of the expense matched by the ROT deduction.
8. Standard method when you sold shares
If you sold a share that increased in value by more than 400%, the most beneficial is to declare the sale according to the so-called standard method. This means that you take up 20% of the sale price as an expense amount for the share.
Note that you can only use the standard method for securities that are listed on a market.
9. Interest compensation – when you cancel a fixed-rate mortgage early
For example, if you redeem a loan early, you may have to pay an interest compensation to the bank. Such a compensation is equivocated with an interest expense and is therefore deductible under income from capital.
10. ROT and/or RUT work – ensure your deduction
If you have had large ROT or RUT deductions in 2018 and have a relatively low income, you must make sure that the tax on your income is enough for all tax reductions. Otherwise, you risk having to pay back some already received tax credits.
However, there are ways to save the situation. For example, if you had already received a deferment on the profit when you sold a home, you can voluntarily return a part of the deferment. You can also try to move over an interest deduction to other individuals in the family.
It is also possible to redistribute the tax reduction to a spouse or live-in partner. If it concerns ROT work, the person to whom the reduction is transferred must, however, own a part of the home where the work was done.
11. If you have loans
Interest on loans is deducted against income under the income type of “capital”. If you have a deficit of capital, you may make a tax reduction. The tax reduction is 30% of the deficit up to SEK 100,000. On amounts over SEK 100,000, the tax reduction is 21%.
If you are two wage-earners where one pays little tax and cannot utilise the tax reduction, you can distribute the expense interests. You can also redistribute the interest if one person has a deficit of capital of more than SEK 100,000.
12. If you work in a different city, leading to double residences
If you have found work in a different city, moved to the new city of employment and kept your old home, you can make a deduction for double housing costs. To receive a deduction, you must stay the night in the city of employment, which must be more than 50 km from the city of residence.
You can receive a deduction for a maximum of two years. Those who are married or live together may also make deductions after this time if the double residence is due to the spouse’s or live-in partner’s occupation. In such a case, you can make a deduction for a total of five years.
Deductions for meal costs, small expenses and travel home
During the first month of the stay at the new city of employment, you may deduct either the actual cost increase for meals and small expenses or a standard amount.
The standard amount is SEK 69 per day if the new city is in Sweden.
30 per cent of the normal amount if the new city is in a different country. You find the normal amounts for different countries at www.skatteverket.se/utlandstraktamente.
Deductions are granted for a maximum of one journey home per week (round trip) with the least expensive means of travel.
13. Private person who is a sole proprietor – do not forget to append the K10 form to the income tax return
As a close company partner in a limited company, you must turn in the so-called K10 (qualified participations close companies). The form is submitted together with Income tax return 1 and it can be submitted both electronically and on paper. In order not to lose saved dividend, it is of the utmost important that the K10 is filed even for the years a dividend has not been decided.
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