Weekly newsletter

Small Taxpayers with Families Stand to Gain from Family Tax Allowance

Júlia Tar 2022.08.03.

Tax expert József Angyal told 24.hu that taxpayers with families who are excluded from the “KATA” (Itemized Tax for Small Businesses) due to the change in legislation can also benefit from the family tax allowance.

If the family is large and the earner earns well until the end of the year, a person can get a sizeable ‘social security refund.’ And for those who are not full-time KATA payers, the end of the year may be more favorable as a flat-rate taxpayer than as a former KATA payer.

The rule is that the taxpayers cannot claim family tax and contribution credits because the tax they pay is neither personal income tax nor a contribution. If, however, they do not comply with the new tax rule, they will have to choose another tax treatment from September. A side effect of the forced change, however, will be that family KATA taxpayers will be able to claim family tax and flat-rate allowances in the newly chosen tax form.

Protesters Rally Against Self-employment Tax Changes
Protesters Rally Against Self-employment Tax Changes

Representatives of several affected sectors - creative industry professionals, hairdressers, film-makers - turned up at Parliament to protest the change in the law, with food delivery workers, for example, standing together in a group.Continue reading

Moreover, this applies not only for the period from September to December, but retroactively to January. This is because, regardless of the fact that they were not entitled to the family allowance as KATA taxpayers in the first eight months of the year, they can claim the whole year’s family allowance for the remaining four months if they have enough personal taxable income. This is because the family allowance does not require proration if a person has not earned personal taxable income for the whole year.

Flat-rate taxation can be opted for this year up to HUF 24 million (EUR 60,800) per year, but if opted for during the year, it must be pro-rated.

József Angyal told 24.hu that he himself was surprised, but according to his calculator, the end-of-year changeover could also provide extra income for second-job and retired employees.

The full article and more details can be read here.

Source: 24.hu

Featured image: illustration via Pixabay


Array
(
    [1536x1536] => Array
        (
            [width] => 1536
            [height] => 1536
            [crop] => 
        )

    [2048x2048] => Array
        (
            [width] => 2048
            [height] => 2048
            [crop] => 
        )

)