From January 2020 and thanks to the withholding tax, the announced reduction of income tax will have immediate effects. To allow you to estimate your tax gain, Bercy has set up a simulator.
As a reminder, at the beginning of June, Prime Minister Edouard Philippe announced the form that income tax reduction would take: “The tax rate for the first tax bracket, which includes 12 million households, will be reduced by three points. This represents an average income per household of 350 euros, or, at this level, an average of one-third of the tax. It’s massive, it’s clear, it’s clear! ».
Edouard Philippe talks in particular about taxpayers taxed in the first bracket of the income tax scale (11%) who have declared a net income between 9,965 euros and 25,405 euros, which will represent the bulk of the earnings.
As for the 5 million households in the next bracket (30%), they will be entitled to an average saving of 180 euros.
Unfortunately, not everyone is concerned. Indeed, the system was designed to benefit the middle classes and not the wealthier social classes. Taxpayers taxed in the next tranche are, therefore, in principle, excluded from the benefit of the scale revision.
These tax cuts will be included in the finance bill for 2020, but Bercy has already worked to adjust the system in order to know the savings of each tax bracket according to the different tax situations.
The withholding tax effect
Thanks to the withholding tax, this tax reduction will be effective from January 2020 and will be visible on your payslip if you are an employee or on the amount of your down payment if you are self-employed.
To find out how much you save on your tax bill, you can already consult a simplified online simulator on impots.gouv, set up by Bercy. Attention, this simulation is only for information. Indeed, it does not take into account certain specific situations (single parents, situations of disability, etc…).
To find out how much the tax “gift” is, you must go to the simulator and provide information such as your annual taxable income after deduction of tax, your family situation and your place of residence.
- A single person with a net income of 30,000 euros should save 125 euros in taxes;
- A couple with an income of 35,000 euros and a child (2.5 shares) will save 246 euros;
- A childless couple with an income of 100,000 euros (2 shares) will save 250 euros.