Today’s article will address a theme that is dear to us, in every sense of the word: taxes. In the same way that knowing your expenses is imperative to optimize your finances, knowing how to calculate your taxes is a plus to be able to identify the actions that could allow you to reduce them. Obviously, approaching the calculation of the tax in a single article is impossible: on the one hand, the whole would be completely illegible, on the other hand I absolutely do not have the necessary competence on the subject! 🙂 So today’s article will simply present everyone with a simple way to understand and calculate their gross taxes. To do this, several steps are necessary and will be described later in this post.
For this exercise, we are going to follow the quest of Monsieur CommercialAmbitieux and the ToutLeMonde Family.
First thing to know to calculate your taxes, your overall net income for the past year. For people whose only income is salary, this is the income that appears at the bottom of your December payslip. It is then communicated to the tax authorities and it is already pre-populated on your declaration. However, remember to check it, you never know. Note that since this year, you must include the mutual part paid by your employer , if you have this employee benefit. Logically, this mutual part is also already included on your pre-filled declaration .
Once this global net income is in your possession, it is necessary for the calculation of your taxes to deduct your professional expenses . 2 hypotheses are available to you:
Third step to calculate your taxes, know the number of tax shares of the household. In general, the principle is as follows:
There are some exceptions for this count (single with child, widower, etc.), you will find more details by following this link.
It is the division of the net taxable income by the number of tax shares which makes it possible to know its family quotient. The latter will in turn allow you to calculate your income taxes.
You will often hear of TMI or Marginal Tax Rate to refer to your tax bracket. There are 6 income tax brackets:
This scale is updated every year, with rare exceptions. It is your family quotient that allows you to know your TMI.
We are finally at the last step to calculate his taxes.
Some believe that all of our income is taxable and taxed only in our highest tax bracket, which is why some fear being raised so as not to move into the higher tax bracket . Fortunately, this belief is false. The tax is actually progressive. To understand how your gross tax is calculated, the easiest way is to continue following our 2 examples.
There you go, you now know how to calculate your gross tax . Many aspects have not yet been addressed, but these 6 steps describe the basic principle for calculating your taxes. We may talk about reduction, deduction and tax credit one day, but that’s another story…
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