Tax return 2024

On March 1st, the digital filing round for Income Tax 2024 (IT 2024) and Corporate Tax for BV and VOF 2024 (CIT 2024) started. As an office, we have requested and received an extension for all our clients, so we are not bound by the deadline of May 1st, 2025. Despite this extension, our goal is to have completed all annual accounts and tax returns by the summer period.

In this article, you will find the most prominent aspects to be aware of during the tax filing for IT and CIT 2024, and we will also share how our process is unfolding within our office.

As indicated in our newsletter in December, our goal is to finalize all tax returns and financial statements by September. To achieve this, we have set a schedule for starting the IT 2024 and CIT 2024 filings. This is also the reason we have requested and been granted an extension for all our clients from the tax authorities. In case of any unforeseen circumstances, we can anticipate them without facing penalties.

The sooner your administration is complete, the sooner we can start the tax filing process. Contact your designated contact person to inquire about any missing information so that you can anticipate the schedule and, if desired, conclude the process earlier.

The process is as follows:

1. We finalize the administration from an accounting perspective.
2. We send an email asking to review the administration and possibly schedule an (online) appointment to address any questions. In this email, we request to review the accounting online to ensure completeness and accuracy, avoiding the need for adjustments or corrections later in the process.
3. Once we receive approval, we forward the information to our tax team.
4. The tax team prepares the financial statements and ensures compliance with tax regulations.*
5. If there are no questions, you will receive an email from the tax team with the opportunity to review and approve your documents (financial statements and CIT 2024) in our tax portal.
6. Upon receiving approval, we will proceed with the IT 2024 filing, completing everything based on the pre-filled information from the tax authorities (and financial statements).
7. You will also receive an email with the opportunity to review and approve your tax return in our tax portal.

*For sole proprietorships, we directly prepare the income tax return since there is no requirement for financial statements.

Changes from the Tax Plans for 2024 and annual key considerations

• Invitation to file remains digital and by mail: You recently received an invitation to file IT 2024. This invitation is still sent via mail in the familiar blue envelope and digitally through your personal Message Box on MijnOverheid. Eventually, the paper invitation will be entirely replaced by the invitation through the digital Message Box.

• Check and supplement the pre-filled return: The Tax Authority already fills in much of the IT 2024 return. For example, the annual statements of your income, pension, annuity payments, and other benefits are already filled in. This also applies to the WOZ value of your own home, deductible mortgage interest, and the balance of the mortgage debt. Bank balances and the (value of) other assets in box 3 are also pre-filled.

• Carefully check the pre-filled data, especially if your income situation has changed. For example:
  • Mortgage refinanced? The interest deduction changes, and you likely incurred additional deductible costs.
  • Errors or omissions? Even if the Tax Authority includes incorrect or incomplete data, you are still responsible and liable for the return.

You also need to supplement the return with any non-pre-filled information applicable to your income situation, such as:

• Donations: Only deductible for organizations with ANBI status.
• Medical expenses: Some costs not covered by insurance may be deductible.
• Spousal support: Payments made are deductible.

2024 figures and thresholds to keep in mind:

1. Own home (Eigenwoningforfait):
   • 0.30% for WOZ values between €75,000 and €1,300,000.
   • 2.50% for WOZ values above €1,300,000.
2. Mortgage interest deduction:
   • Capped at 36.49% for all income levels.
3. General tax credit (Algemene heffingskorting):
   • Maximum: €3,234.
   • Phases out from an income of €23,173 and expires entirely at €77,456.
4. Box 3 heffingvrij vermogen (Tax-free capital in Box 3):
   • €61,000 per individual, €122,000 for partners.

IT 2024 Return Information:

• Owner-occupied home imputed income: In 2024, the imputed income from owner-occupied homes has been reduced from 0.35% to 0.30% on the WOZ value for owner-occupied homes with a WOZ value between € 75,000 and € 1,300,000. Above that, the rate remains at 2.50%. Therefore, you have to add less for the owner-occupied home. The 2024 owner-occupied home imputed income is calculated based on the 2024 WOZ value of your home with a reference date of January 1, 2023. That value has likely increased. As a result, the benefit of the reduction in the owner-occupied home imputed income may be offset.
• Allocating owner-occupied home imputed income and mortgage interest deduction differently: If you have a mortgage for a property that is your main residence, you can deduct the interest. If you took out a new mortgage for the first time on or after January 1, 2013, you must also repay the own-home debt to qualify for the interest deduction. Your mortgage debt decreases annually due to repayment. So, you pay less interest each year and therefore have less interest deduction. You can deduct the mortgage interest at a rate of 36.49%. Since January 1, 2024, you no longer receive higher interest deductions if your income falls within the highest tax bracket. The income threshold at which the first tax bracket of 36.49% transitions to the second (and highest) tax bracket of 49.50% in 2024 is € 77,456.
• Why distribute differently? Claiming the mortgage interest deduction for the person with the highest income may no longer be the most advantageous option. If your income is higher than € 77,456 and that of your partner is lower than this amount, it is likely even more advantageous to claim the owner-occupied home imputed income and deduction for your lower-earning partner. As a result, the owner-occupied home imputed income is taxed at a lower rate, namely 36.49% instead of 49.50%. However, the most significant advantage is achieved through the higher general tax credit (in 2024: maximum € 3,234) that your lower-earning partner receives due to the mortgage interest deduction. The general tax credit decreases by 6.095% from an income of € 23,173. At an income of € 77,456, this tax credit is entirely phased out to zero. If you have an income above this income threshold, you do not receive a general tax credit. If your partner has an income between € 23,173 and € 77,456 and you claim the owner-occupied home imputed income and deduct the mortgage interest for them, their income is reduced, and therefore their entitlement to the general tax credit increases. Thus, distributing the lower-taxed owner-occupied home imputed income and the higher general tax credit to the lower-earning partner yields more benefits than if the imputed income and the deduction were claimed by the higher-earning partner with income in the second tax bracket.

Tip: It is also wise to have the provisional refund or income tax assessment for 2024 checked. It may be necessary to adjust these accordingly.

• Submit (modified) own-home loan from family or BV: Did you buy a house or renovate a house in 2024 with a loan from your family, a third party, or your own BV? In that case, you can only deduct the interest from your box-1 income if you provide the data about that loan in the 2024 income tax return. This reporting obligation for loans from non-administration-obliged individuals only applies to loans entered into on or after January 1, 2013, and on which you are required to make annual repayments. If the interest on this loan changed in 2024 or the loan was refinanced, you must also indicate this in your 2024 income tax return.
• Phase-out deduction no or small home debt: In early 2019, the gradual abolition over 30 years of the rule started, whereby you do not have to add imputed rental value to your income if you have no or only a small mortgage. This occurs when the imputed rental value is higher than the interest and/or financing costs you have paid. Until 2019, you did not have to add anything. But since then, you must add 3.33% extra annually. In 2023, it was 16.67% of the balance of the imputed rental value and deductible interest and costs. In 2024, it is 20.00% of this balance.
• Deduction deposit FOR into annuity: You can no longer build up a pension in the fiscal old-age reserve (FOR). Have you built up a FOR in recent years? Then you will have to settle this with the Tax Authorities at some point. The ultimate moment for this is upon cessation of your business. Then you will have to add the reserve to the profit. And then the full amount of the accumulated reserve is subject to income tax. Fortunately, you can arrange for a deductible (bank) annuity for the amount of the accumulated old-age reserve, so that you do not owe income tax on balance upon cessation. The amount by which the FOR decreases is indeed taxed, but on the other hand, the premium for the annuity is deductible. Of course, you must have sufficient liquid assets to deposit the amount of the old-age reserve. If so, you can (partially) deposit the reserve until July 1, 2025, into an annuity and still deduct it in your 2024 income tax return.
• Deduction of donations: Donations to charities with an ANBI status can be deducted if you can prove that you actually paid the donations, for example, with a transfer or receipt. Ordinary donations are deductible above a certain threshold amount depending on your income. The Tax Authorities have already filled in the threshold amount in advance. Periodic donations are fully deductible, but in that case, you must meet certain conditions. Cash donations are no longer deductible. Tip: Do you make the same donations to the same charities every year? Consider making it a periodic donation. Then your entire donation is deductible, not just the amount above the threshold.

If you have any questions regarding the information in this article, or if you have questions about the year-end closing and our planning in that regard? Or do you want to discuss with our tax advisors the possibilities available towards the end of the year? Let us know and schedule a (online) meeting if necessary with one of our specialists. This way, you can also discuss what we need by the end of the year, and if desired, we can make a plan with you to prepare your annual accounts in time.