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Mr. Roel Kolder tax lawyer Iris Kolder MSc. 10-03-2011 PrOUt Utrecht Income taxes 2010 for PhD students.

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Presentation on theme: "Mr. Roel Kolder tax lawyer Iris Kolder MSc. 10-03-2011 PrOUt Utrecht Income taxes 2010 for PhD students."— Presentation transcript:

1 Mr. Roel Kolder tax lawyer Iris Kolder MSc. 10-03-2011 PrOUt Utrecht Income taxes 2010 for PhD students

2 The speaker of the day Mr. Roel Kolder, tax lawyer. Has been working for the last 29 years at PwC, as a VAT(BTW) specialist. He is the father of two daughters (PhD-student, Psychologist) who he has helped for years with their income taxes and has therefore become an expert in this field. Iris Kolder MSc., Graduated from the UU(2007). Currently doing a PhD “Identifying genetic modifiers in cardiac arrhythmias “ at AMC(UvA) and will do her own taxes this year!

3 Income taxes

4 The Dutch Tax Administration goes back (by law ) for 5 years Therefore save everything yourself for 5 years! And not just only on an external hard drive Income taxes are withheld from your monthly paycheck Income taxes is determined based on your total income of that year Therefore, if you’ve worked for 6 months then too much income taxes is withheld from your paycheck. All employers count!

5 Case: A PhD-student who directly starts working after receiving a Master’s degree 1-10-07 started a PhD study. Totally withheld income taxes over 2007 was € 1.400 Subsequently filed for tax returns over the year 2009 The tax return was done before april 1st 2008 The total amount of € 1.400 euro’s was transfered (with interest) in June 2008

6 Tax return program Go to Download the tax return program for the right year Find your DigiD code of request a DigiD code at DigiD is your digital signature with the Dutch government Keep all your receipts next to your PC! In case of doubts you can fill in your tax return in the program but wait with sending it.

7 Tax return You file your tax return from the previous year. In 2011 you file your tax return from 2010. New services: the online return form is partially filled in based on your previous tax return. In 2010 it didn’t work properly, it was available very late and not a lot of information was filled in. The experience in 2011? Check if the correct information has been used.

8 Tax return If you haven’t done your tax return in the past you can still do it for those years. To do so, you need your old annual paycheck statements from your (former) employers. If you had holiday jobs during university, they might have deducted too much taxes from your paycheck and you can ask for your money back. The government usually gives this back, but it’s not enforceable.

9 Old tax returns (1) Focus on health care costs Additional health insurance was deductable Home pharmacy was deductable A person with glasses has a chronic illness and costs were deductable Also the cost of the glasses itself were deductable Specials diets were deductable, etc. In the tax returns programs supplementary information boxes are available

10 Old tax returns (2) However, sometimes it is not clear whether something is deductable or not Tip : Check it on the Belastingdienst-website Check it in the “Belastingalmanak” from that year And if possible, in the tax return program explain why you believe it should be tax deductable The tax return is then filed correctly and corrections are possible.

11 Educational costs (2010) Certain things are deductable above a certain threshold The threshold for 2010 was € 500 per person Who has bought that new PC??? Look at it in all fairness and reason If your employer compensated you for it, you can’t deduct it from your taxes! No hobby studies! Plan your educational costs! Buy a new PC in January instead of December if you can’t declare it in December.

12 Educational costs Educational books, literature Tuition Membership of a faculty association 50% of your home internet subscription. The rest is private. Write off expensive educational books. Not the costs for decorating your working room No costs for food and drinks No travel and housing expenses

13 Case: The PC (1) Buying a good PC that will only be used for your education/PhD studies. After all, your old PC is just for emailing! Remaining value is 10 % Costs can be divided over 3 years Paper and ink can be educational costs, but you use in the year that you bought it.

14 Case: The PC (2) You bought the PC for € 599,- TFT screen € 250,- Printer € 130,- Keyboard and mouse (wireless) € 100,- In total € 1079 remaining value = 10 % Yearly deductable: € 323,70(threshold 2010 is € 500,-) (€1079- €107,90=971,10 divided by 3) In conclusion: you are better off buying that MacBook Air €1700-170/3= € 510  That puts you over the threshold!

15 Travel expenses Employers usually make a financiel contribution to the work-travel expenses of their employees. This will be deducted from your travel expense that you can declare. You have to travel at least 10 km. 1 day or more, for at least 40 days a year. Keep public transport receipts/declarations of costs Usually there is nothing left to declare. Just fill it in and the system tells you if your getting anything back.

16 Promotion costs Printing/shipping your booklet including telephone costs/shipping, etc. If the copy number is higher than the minimal requirement of the university then the additional costs are not tax deductable!!!

17 Promotion costs If the price proposal from the printer for the first 50 copies that the UU demands are let’s say € 2.000 And you order 250 extra for only € 500 Then the tax services could say that only 50/300 X € 2.500 = € 416,66 is tax deductable If there is a separate bill for the additional 250 copies then the amount of € 2.000 is completely tax deductable! In short, make good arrangements with your printer!

18 Promotion costs Costs for renting the proper clothing, also for both paranymphs Costs of the reception Sometimes you can get a contribution from your employer/sponsor! Not deductable are the costs of the promotion dinner Not deductable are the costs of the photographer For more tips also look at:

19 Donation The financial donation parents can give their children (18-35 years) yearly, free from donation-taxes, is a maximum of € 5030 for 2010 One higher donation is possible but many conditions apply to this and need to go through a notary. For 2010 this is € 24.144 or up till € 50.300 for purchasing a home, education or proffesional. Be carefull to read all the conditions!

20 Donation Why a donation instead of parents paying for some promotion costs? Parents can’t declare any of these costs but the PhD- student can.

21 Being stationed abroad Often alot of double costs Employer could pay for the (extra-territorial) costs which is charged for taxes (See almanak 45.4.10) Renting out your appartment temporarily could be benifical, there are 11 tax possibilities (See almanak 5.20.1) Look closely at your insurances and your health care insurance in particular!

22 Buying your own house Tip: do not buy a house in Utrecht but on the country side in North-East Groningen Good real-estate agent in a good market, fee usually is around 1.5 % of the purchasing price. If a house is on the market for a while a lower fee might me negotiated! (€ 995-€ 1.500) In Amsterdam a purchase contract has to go through a notary. Perhaps in the future this will no longer be the case.

23 Buying your own house Find a affordable notary for the transport act and mortgage act. Lot’s of family who like wall-paper and painting etc. External contractor, only 6 % VAT on labor costs. If you need a lot of construction material, buy them ahead of time when they are on sale in the home improvement stores (20 %/15 %).

24 Buying your own house With the “kosten koper (KK) ” (cost buyer) count on about 10% additional costs With the “vrij op naam (VON) ” (free on name) you pay for the mortgage certificate and various provision costs, so in practice the costs are still rather high Make a budget ahead of time Take setbacks into account

25 Buying your own house With an old house have the construction checked by an engineer. (Watch the CV!) Costs around € 300 At the VVE (Union of Owners) ask for the annual account to check if there are sufficient funds. If there is a housing corporation in the VVE it’s usually a sign the finances are in order. Watch out for the individual ground lease!

26 Buying your own house Is NHG warranty recommended? Costs are deductable Costs of the taxation rapport are deductable Costs of the mortgage certificate and land registry are deductablen Not deductable are the costs of the transport certificate! Not deductable are the costs of the real estate agent! In the appendix of the handout sheets there is a list of deductables according to the goverment.

27 Buying your own house Costs fee real estate brokerage are deductable Costs for fee of preparation and elongation fee are deductable Costs bail-bonding provisionare deductable (yearly) The costs of the monthly paid interest Downside is the own housing forfait! In politics the deduction of the mortgage-interest is being discussed!

28 Buying your own house Special rules for monumental houses Deductable are the monthly or yearly paid contributions to ground lease. When you choose for a savings mortgage the saving amounts are not deductable The contractual savings are taxfree (gross is net)! So if your not planning of buying a house or getting married soon think about getting contractual savings (spaarloon).

29 Buying your own house Biggest problem 2011 is securing financing from a bank. A donation from parents (€ 50.300) could be a solution. When borrowing money from (grand)parents, they should get a second mortgage for the amount. Exp. Purchasing a house € 200.000(VON), bank will only fund you € 150.000, grandparents want to help with the rest sum. At a forced sale of the house it sells for € 175.000, The grandparents only get € 25.000 This form of financing is risky for (grand)parents when a house isn’t worth enough.

30 Provisional tax returns In buying the house you are faced with high costs which are for a part tax deductable A tip is to hand in a provisional tax return on the day of transport of the house. Personal experience: a return sent in on december 2nd 2009 and money was transferred on december 28th 2009

31 Living together and taxes When living together with your partner and he/she hardly has any income it can be good to do a joint tax return. Tip find another partner! Are the taxes going to pay € 167,- each month? Just try it! The rules have changed again for this year!

32 The first child The costs according to the CBS 19 % of the net income in total €100.000/€ 150.000 Child benefits € 194,99 per 3-months Child benefits depends on the combined income and number of children. Look at Very often the employer will also pay for part of the costs.

33 The first child The cheapest child day care people are the grandparents! If the parents are divorced, daycare for 7 days in the week is good and arranged quite cheap!

34 Averaging the income over 3 years Threshold €545 Taxable income from box 1 Taxes without tax credit IB tarifs see website Apply for averaging 6 weeks after receiving a final decision on your taxes. This usually arrives in october. Case: following in the next slides

35 Averaging 2007 € 6.179/ € 2.078 2008 € 24.811/ € 8.931 2009 € 30.018/ € 11.087 ---------------------------------------- Total € 61.008/ € 22.096

36 Averaging

37 Average income and owed taxes. See excel file on. ( € NUL) (€ 14.50) Total € 22.096 Owed € 21.158 To much paid € 938 min threshold of € 545 € 393 paid back by the goverment.

38 Averaging Beware of the pitfall! The first € 17.319 is against 33,65 % taxes and the amount over that and the rest against 41,4 % of even 52 %. Not for foreign taxpayers.

39 Questions?

40 Presentation Handouts for the presentation. Dutch/English version available. Letter for averaging income. Excel program for calculating averaging income.

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