Lump-Sum Tax for 2023 – Tax Breaks

ByMateusz

The clock is ticking down to April 30, 2024, the final date for tax settlements for those on the lump-sum tax scheme. To fully leverage available tax breaks and minimize your tax burden, it’s essential to dive into the annual settlement’s critical aspects.

  • Deadlines and Forms
    All you entrepreneurs on the lump-sum road, mark your calendars: PIT-28 forms are due by April 30, 2024. Don’t let this date slip by, as tardiness can lead to unwanted penalties.

Joint Settlement with a Spouse, Child Allowance
When it comes to lump-sum income:

Joint filing with your spouse? That’s a no-go.

  • And forget about child allowances.

Tax Breaks
Good news, though! Lump-sum taxpayers can still tap into a variety of tax breaks to significantly ease their tax responsibilities. Here’s a rundown of the key ones:

  • Internet Allowance: Covers part of your internet expenses if it’s for work. The deets:
    • You must incur internet usage expenses within the tax year.
    • Claims can only be made in two consecutive tax years.
    • Internet expenses can’t be counted as business costs or deducted from revenue under other laws.
    • The max deduction, i.e., income reduction for the tax year, is 760 PLN, potentially saving you between 60 PLN to 120 PLN in taxes.
    • Proof of purchase, like invoices or receipts detailing service type, payment amount, and confirmation, is a must.

Donation Allowances: Deduct the value of donations to charitable, cultural, religious causes, and education, subject to specific criteria.

  • Donations for public benefit, religious worship, blood donation, and vocational training are deductible, up to 6% of the income earned in the tax year.
  • Full deductions are available for church’s charitable and care donations, and for blood donations, the deduction equals the monetary equivalent for the blood or its components as per specific regulations.

Rehabilitation Allowance: Designed for the disabled, this allows income deduction for rehabilitation-related expenses and necessary equipment purchase.

Return Allowance
Thinking of moving back to Poland after a long time away? Here’s some great news! The Return Allowance is like a tax “welcome back” package. If you’re crossing the Polish border intending to settle permanently after December 31, 2021, this allowance can be your financial lifeline. For the next four tax years, enjoy an income tax exemption from personal income on certain earnings.

To tap into this allowance, you’ll need to:

  • Move your residence to Poland’s territory after December 31, 2021.
  • Start earning income that qualifies for the allowance, such as foreign earnings from employment, contracts, or running your own business.

Moreover, specific conditions related to citizenship, the Polish Card (Karta Polaka), or citizenship of other specified countries (countries of the EU, EEA, Switzerland, Australia, Chile, Israel, Japan, Canada, Mexico, New Zealand, South Korea, United Kingdom or USA), and the proof of residence for tax purposes, apply.

Remember to check which incomes qualify for the allowance and ensure you meet all the necessary conditions. When in doubt, consulting with a tax advisor can help navigate the process seamlessly. Returning to Poland has never been more enticing!

4+ Allowance
This significant financial support exempts income up to 85,528 PLN annually from income tax. Parents or guardians raising at least four children, under certain conditions regarding their execution of parental authority, legal guardianship, or foster care, can benefit. It’s crucial that your kids, whether minors or students up to 25, meet specific income conditions.

Embracing these tax breaks can make a substantial difference in your tax settlement. Dive in, explore, and perhaps even consult a tax expert to maximize your benefits. The world of tax allowances awaits!