by Paul Gibson
Home >> Tax Return
If you are an average citizen, your tax bracket probably oscillates between €18,000 and €30,000. Each specific income group normally has to pay a certain percentage of their earnings for the year to the government in concept of income tax.
This year, you did not buy a house yet, so you may have been renting out one of those 10×10 mini-apartments the Ministry of Housing and Urban Development designed. You may have had to pay a pretty penny for that small apartment too. The good news? You can claim these payments as a deduction on your tax form. In most countries, the quantity of money you can deduct on your taxes is limited depending on the category. Examples of expenses that are usually deductible are tuition costs (education), mortgage payments, rent or even car payments.
To determine the amount of money you have to pay, you normally have to determine your “taxable amount� or “tax base,� which is any wages, salaries, etc. Then you look at the table to see which percentage you have to apply. This will give the total amount of taxes you owe. If you can claim any deductions, you use those to cover the taxable amount. If you are lucky and those tax deductions exceed the payable amount, you get a refund for the difference!
A lot of people nowadays like to file their taxes early because they know they are going to get a tax return (refund)!
So why do we pay taxes in the first place? Theoretically speaking, taxes cover expenses such as public transportation, infrastructure and here in Spain, medical expenses.
There is an old saying in English: “There are only two things that are certain in this life. Death and taxes No matter who you are, how much you make, or even if you don’t have a job, you still pay taxes.
Everywhere you look there are taxes. Real estate (property) taxes, sales tax or VAT on anything you buy, even taxes for energy, communications and travel. All of this begs the question… who created taxes?
The philosophical answer might be, well taxes are really shared expenses. Ever since humanity decided to use “moneyâ€? they really shared expenses as well. But a look at who created “taxesâ€? as we know them today from a business standpoint… as a percentage of our salary or a fraction of the cost of a product is harder to find.
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Posted on http://www.weeklyletter.com at 2007-05-01 10:00:00 +0200
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Let me make one comment ,
you have to pay taxes to goverment? or to the ministry, is different, is not it?
Otherwise, I got upset yesterday when I realised that I could not get a refund from my mortage taxes. It going to be a extra salary this year but I will tell you next week
Remember all of us are Hacienda.
Fortunately, I have received (and “invested”) yet my extra “salary”... In Gipuzkoa, the period to present our “declaración” started past monday, 23th. Thanks to my mortgage, I have recovered a good part from my taxes, as you have explained. I like this way to get returned my money, because it’s not a large amount and I don’t mind if Treasury takes profit from it, while these earnings continue belonging to Spanish citizens.
The hour to settle scores with the government has arrived. Generally settle scores used to be a bad time in any circumstances, and even when you must to pay so much.
On the other hand to the majority of the people usually comment, particulary I think the best situation is when the amount that you have to pay or perceive is minimum. It means that the table you have to apply is very close to your salary, your deductions and your own fiscal expenses. The direct consequence of this fact is that the money you actually win have reminded on your hand along the year.
It seems me an unfavourable situation when the refund is very high, because it means that the government has got your money during the year in spite of that shouldn’t has got it and returns to you this money without the corresponding interests. The addition of these yielded interests along all the year by all the amount that the government must to return at the end, it supose a big profit which the taxpayer can’t touch anything.
I don’t want to speak about when you have to pay a big amount. Although you have got the money during the year, the feeling in this moment become very unpleasant.
Regards and good luck with your income tax.
Well Angel, once again another great addition to the Business Weekly with some very intelligent comments.
I would imagine that even though “Hacienda” or “the Spanish Revenue Service” may be a separate department from the MInistry of Housing and Urban Development, thay are all the same: the giant bureaucratic MONSTER! The Revenue Service raises money for the government while the Ministry of Housing basically does the same, so if there is a difference when it comes to taxes, it is “a distinction without a difference. “
Thanks again!
Paul
Thanks for your comments ELENA!
First of all, congratulations on your tax return! I think there are very few model citizens around here like you that are willing to give up some of their earnings for the sake of the common good like you! Most of us think of taxes as a “necesssary evil, ” and certainly not a contribution to the “community chest.” You have opened up my eyes to the truth….
Paul
TONI:
Thanks for your comments! You have made reference to something we call ” TAX WITHHOLDINGS” – these are the amounts of money that are “withheld” from your paycheck each month as a contribution towards your annual income taxes. You have made a very valid and fair assessment. Where does all that interest go?
Something tells me that someone is filling their pockets with gold!
Thanks again!
Paul