Invitation to make tax return in your Message box as well
Recently you received the invitation to file your 2017 income tax return. This invitation was not only sent to you by post in the well-known blue envelope, it was also sent electronically. The Tax and Customs Administration no longer wishes to invite you by post to make your tax return, but wishes to do so electronically from now on. To let you get used to this, the Tax and Customs Administration also sent the invitation to your personal Message box at MijnOverheid this year. If you wish to take a look at it, you need to activate your account. If you have not done so yet, please go to www.mijnoverheid.nl first, and log in using your DigiD. Your account and your personal Message box will then be activated, and you will see which messages have been sent to you. In due course, the paper invitation will be entirely replaced by the electronic invitation through your Message box.
Have the pre-completed tax return checked and supplemented
For a large part, you do not need to fill in the tax return yourself any more. The Tax and Customs Administration already did this for you. For instance, the annual income statements, pension, annuity instalments and other benefits and payments have already been filled in. That also goes for the WOZ value of your owner-occupied home, the tax-deductible mortgage interest and the balance of your mortgage debt. Bank balances have also been filled in. All the same, it is sensible to properly check all the pre-completed information, or have someone else check it. Mistakes will be made after all, or the information may be incomplete. You yourself are and will remain responsible for the tax return, even if the Tax and Customs Administration included incorrect information. In addition you will need to supplement the tax return with information that has not been pre-completed and that applies to your income situation. This may for instance be tax-deductible items such as gifts, medical expenses, study costs and spousal maintenance paid.
Too much hassle?
Despite the pre-completed tax return, it still can be quite a chore to fill in the 2017 income tax return fully and accurately. Do you consider it too much hassle? We would be happy to do it for you. Hand in the information relevant to your 2017 income tax return with us, and we check the pre-completed information and supplement the tax return where necessary. If we file the tax return before 1 April 2018, you can be certain to be notified by the Tax and Customs Administration before 1 July 2018. Call us for more information or an appointment: +31 (0)70 313 10 00
Below we have listed the most striking things that you need to pay attention to when making the 2017 income tax return. We focus on the changes in Belastingplan 2017 (Tax plan 2017) and on some things that you need to be attentive to every year. Below we have listed 14 points:
1 Less mortgage interest relief
If you have a mortgage for a house that is your main residence, you can deduct the mortgage interest. However, there are a few things that you need to be alert to. For instance, did you take out a new mortgage for the first time on or after 1 January 2013? In that case you have to redeem your home acquisition debt. As a result, your debt decreases annually, so you pay less interest every year and therefore your interest relief decreases. Your interest relief also decreases annually if you have income that is taxed in the highest tax bracket of 52%*. In that case, the maximum rate at which you can deduct the expenses of the owner-occupied home will namely be lowered by 0.5% annually and will be 50% in 2017.
*) Let op
The income limit at which every Euro you earn in excess will be taxed at 52% instead of 40.80% has gone up just like last year. In 2017, you will only be paying 52% of income tax on every Euro from a taxable income upwards of €67,072.
2 Declare refunded penalty interest
Did you pay too much penalty interest in 2016 or 2017 when redeeming or remortgaging your home acquisition debt? And did your bank refund the paid surplus penalty interest to you in 2017? In that case you will have to declare the refunded penalty interest in your 2017 income tax return. Was all penalty interest deducted in 2016 and was part thereof refunded in 2017? Then you will have to declare the refund as negative deductible expenses in the 2017 income tax return. Did you pay too much penalty interest in 2017 but did you get the paid surplus penalty interest back again in 2017? In that case you will have to deduct the refunded penalty interest from the paid interest. The balance must be declared in your 2017 income tax return.
3 Declare (changed) loan for an owner-occupied home from family or private limited company
Did you buy a house in 2017 with a loan from your family, a third party or from your own private limited company? In that case you can only deduct the interest from your box 1 income if you declare the details of that loan in the 2017 income tax return. This requirement to report loans from non-taxable entities as introduced on 1 January 2013 only applies to loans taken out on or after 1 January 2013 and that you are obliged to redeem annually. Did you take out a loan for an owner-occupied home with your family or a third party or your own private limited company on or after 1 January 2013, and did you change that loan in 2017? This must also be declared in the 2017 income tax return.
4 Interest deductible again after payment arrears home acquisition debt
Home acquisition debts incurred on or after 1 January 2013, must at least be redeemed in annual instalments. A temporary payment arrears is allowed, but if that arrears is not made up within the set term, the home acquisition debt is relocated to box 3. As a consequence, the tax deduction will not apply temporarily. Your home acquisition debt will return to box 1 once you comply with the repayment requirement again. In that case, you are allowed to deduct the interest again in the income tax return.
5 Policies associated with home ownership redeemed before the term? Use the exemption
Do you have a capital sum insurance associated with home ownership (KEW) or a savings account associated with home ownership (SEW) or an investment account associated with home ownership (BEW) or a box 3 capital sum insurance dated prior to 1 January 2001? Then in case of payment you can use an exemption in box 1. Since 1 April 2017 it is no longer a requirement that you paid premiums or deposits for at least 15 or 20 years. Did you redeem (a part of) your home acquisition debt before the term using the saved or invested capital in one of these savings-based or endowment mortgages in 2017? In that case you can also use the exemption.
6 Reduce exemption KEW, SEW and BEW with exemption box 3 policy
Box 1 has an exemption for the KEW, the SEW or a BEW. That means that under certain conditions the payment from these products is exempt in box 1. During the maturity of the KEW policy, SEW or BEW you do not have to pay tax in box 3 either on the value of the policy, the savings account or the value of the investment account. Do you also have a capital sum insurance dated before 14 September 1999 in addition to a KEW, SEW or BEW? This policy falls in box 3 and is also exempt, both during accrual and the moment this capital sum insurance is paid out. Did you use this exemption in box 3 upon payment? In that case, if the KEW, SEW or BEW was paid out in box 1 in 2017, you will have to reduce the exemption in box 1 with the used exemption in box 3. You will have to declare this in your 2017 income tax return.
7 Double exemption for policies upon request also in case when there is no double beneficial entitlement
Are you partners for tax purposes and do you wish to make use of the double exemption inter vivos in a so-called Brede Herwaarderingspolis (policy associated with the general tax reform), KEW, SEW or BEW? In that case you both need to be beneficiaries. But if you have forgotten the double beneficial entitlement, you can still use the double exemption by making a joint request with the income tax return, as a result of which 50% of the payment appears with each of you. You will then each of you use your own exemption.
8 No more double interest relief after temporary letting?
Do you have an unsold house that you are meanwhile letting temporarily? After the period of temporary letting, the right to double interest rebate revives for the remaining term in which interest relief is still allowed. That term is 3 years. After temporary letting, check whether that term has expired. If that is the case, you are no longer entitled to double interest relief.
9 Do not forget to deduct the annuity premium
If you have a pension deficit, you can arrange for an additional income to cover it. For instance by taking out an annuity policy with an insurance company or an annuity bank savings product with a bank. The annuity premium you paid in 2017, can be deducted in your 2017 income tax return.
10 Use the life-course scheme tax credit
Did you withdraw (a part of) the balance of your life-course savings scheme in 2017, for instance for a sabbatical? The withdrawal is taxed in box 1, but you can use your life-course scheme tax credit. This is a tax credit in box 1. As the taxation of the withdrawal of the balance of your life-course savings scheme takes place via your employer, it may be so that your employer has applied the life-course scheme tax credit to it. But in case that has not been done yet, you will have to fill it in yourself in your 2017 income tax return.
h2>11 Education expenses still deductible
Under certain conditions, education expenses can still be deducted in your income tax return. This deduction was to be abolished and replaced by a new non-taxation expenses scheme in the form of educational vouchers. Implementation of this new scheme takes more time than anticipated. That is why the existing deduction of education expenses is to be continued for a little while yet.
12 Deduction expenses for nationally listed building still possible
The subsidy scheme replacing the deduction for nationally listed buildings has also been postponed. That is why in 2017 as well, you can still deduct maintenance expenses for your nationally listed building in the income tax return. The deduction amounts to 80% of the maintenance expenses paid. This applies both to nationally listed buildings you are using as your own residence, and to buildings in box 3.
13 Make sure that the box 3 capital is correctly divided
Since 1 January 2017, the tax-free allowance in box 3 has been increased up to €25,000 for each taxable person. The fictitious yield of 4% was also replaced by a graduated scale of annually changing fictitious yields. For 2017 the fictitious yield is 2.87% for a capital of up to €100,000 (for each taxable person), between €100,000 and €1 million it is 4.60% and in excess of that 5.39%. You will pay 30% of box 3 taxation on this fictitious yield.
Tip
Under the scheme that applied up to and including 2016 it did not matter much with which partner the capital in box 3 was declared. As from 2017 this has become important indeed, as a result of the various fictitious yields. If, for instance, you have capital in box 3 to the amount of €200,000, it makes sense to divide it equally over you and your partner in your income tax return. In that way the fictitious yield of 2.87% applies to each of you. If you do not divide it, the fictitious yield of your capital in box 3 in excess of €100,000 will be 4.60%, so in that case you would be paying a lot more tax.
14 Obligation for child maintenance not in box 3
Child maintenance entitlements are not an asset for the capital yield tax base of box 3. As from 1 January 2017 the obligation for child maintenance can no longer be considered a debt in box 3.