, How do I file my Income Tax Return: individual or joint?

How do I file my Income Tax Return: individual or joint?

The campaign to present the 2020 Income Statement continues its march since it started on April 7 with the electronic presentation. Remember that since May 6 the presentation by phone is also available, and since June 2 you also have the possibility of doing it in person.

The most common system for filing the income is so individually , but it is very important that you consider whether you should present it together , because it can be beneficial to your pocket .

Making the Income Declaration individually or jointly, ultimately, will always depend on the taxpayer, and it is something voluntary. However, today we want to tell you about the advantages that deciding on one option or another can bring you . Depending on your personal circumstances, it will be better for you to choose the individual or the joint return.

Check if you meet all the requirements

The first thing you should make sure is if you meet the requirements to be able to make the joint return . For this, taxpayers have to be part of a family unit , which can be of several types :

  • Marriage not legally separated and with minor children (who do not live independently) and children of legal age who are legally incapacitated.
  • If there is no marriage : the one formed by a father or a mother and the cohabiting children who meet the aforementioned requirements.
  • De facto couples : only one of the two parties can form a family unit with their children, provided they meet the criteria already mentioned.
  • Single-parent families : considering as a family unit the one formed by a parent and their children.

The minimum taxpayer must be 5,500 euros per year in any of these four modalities, regardless of the number of members that make up the family unit.

Make your decision well

Choosing one or the other option is a decision that you have to make just when presenting the return and it is very important that you have it very clear , since once you choose the form you will not be able to modify it. You could only change it by filing a new return within the established deadlines.

If you make the joint return, all the members of your family unit are subject to the tax jointly and severally , so the debt can be demanded from any of them. Thus, if one of the members presents their declaration individually, the others must use the same procedure. Choosing a specific route in a campaign does not imply having to use it in successive years.

The reductions when doing joint taxation

One of the great advantages of paying taxes as a family unit is the reductions. The amount will vary according to the modality:

  • Family unit made up of a married couple not legally separated and their children (if any) : a reduction of 3,400 euros per year is established in the tax base for joint taxation.
  • Family unit made up of a father or mother who is not married, widowed or legally separated and with minor or elderly children who are legally incapacitated and subject to extended or rehabilitated parental authority, who live with him or her : a reduction of 2,150 euros per year is established.

Considerations when making your choice

  1. Take into account your income : it is advisable to do joint taxation when there is a spouse in the marriage who does not receive income or, if he does, that is very low. But if the two members of the couple work, it is best to do it individually, since each one can apply the minimum amount of 5,550 euros.
  2. Contributions to pension plans : bear in mind that the contributions of the spouses to their individual plans reduce the tax base in the same terms, both in the case of joint and individual taxation.
  3. The reduction for housing : if the couple has a half mortgage on their habitual residence, with the right to a deduction for having acquired it before January 1, 2013, it is advisable to make the declaration separately, since a deduction of 15 % each (up to 9,040 euros).

The controversy over the elimination of joint taxation

Controversy has recently arisen over the possibility of eliminating joint taxation . Although, for the moment , this possible deletion remains “in the air . 

Within the Recovery Plan that the Executive sent to Brussels, the Minister of Economic Affairs and Digital Transformation, Nadia Calviño, described as “errata and surprise the mention made in an annex to the Recovery Plan on the gradual abolition of joint taxation in the Personal income tax ” .

The minister stressed that “we are talking about a misprint within the body of the Plan, and in the tax file what is expected is the creation of the tax reform expert group, which will evaluate the issues of AIReF (Independent Authority for Fiscal Responsibility ) regarding the effectiveness of the tax credits that already exist ”.

We assured that “the fiscal proposal sent to Brussels within the Recovery Plan in no way prejudges the final proposal of the Government, which will first wait for the report of the group of experts, which must conclude it in February 2022.”

Do not forget that there is very little left until the deadline for filing the 2020 Income ends . If you have not done it yet, do not take risks and leave your 2020 Income Statement in the hands of experts . You see that there are many aspects to take into account and, in addition, making mistakes can be very expensive.

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