Are you sure the taxes you pay are too high? Aryeh Goldin - Tax refunds has been involved in the field for many years and explains how you can track all tax reductions. So just in case you are in a hurry to check eligibility for tax refunds, you should know all the main reasons for the formation of gaps that benefit quite a few employees in receiving refunds. The first reason Aryeh Goldin points to is changes in the total monthly income for any reason. The tax deductions are calculated based on an estimated calculation of the annual income of each employee. The tax authority multiplies the total monthly income by the number of working months during the year and arrives at the total expected annual income (assuming there will be no changes in salary or prolonged absences from the workplace). According to the total annual income, it is possible to calculate how many taxes each employee has to pay according to the tax rates that we all know. So why do changes in the monthly salary create tax gaps that lead to many refunds? An example is given that will explain the point well.
Has the salary been affected? This may not have been updated with the tax authority and you continue to pay the high salary
An employee who earns about NIS 10,000 every month is expected to earn NIS 120,000 every year, assuming he manages to complete all the months of work. Based on this annual income, that employee will be charged a one-year tax deduction divided into 12 monthly payments. The reason for distributing the annual deduction for payments is to prevent financial difficulties for the average household in Israel. If there was a decrease in that employee's salary for a variety of possible reasons (cuts in working hours, prolonged absences due to injury or illness, closures during the corona virus period, etc.) and on average he earned only 7,000 shekels per month (and not 10,000 as he was expected to earn if he completed all the working days or his salary would not have been affected), his actual total annual income is NIS 84,000 compared to an expected NIS 120,000. These disparities often cause the tax authorities to continue deducting tax according to the initial annual income rate (NIS 120,000) without calculating the changes.
Do you deserve credit points? It's important to make sure you really get them!
Therefore, Aryeh Goldin - Tax Refunds explains that if your salary decreased during the year for any reason, there is a high chance that you paid too high taxes and you will be entitled to receive refunds. The second reason pointed out by Aryeh Goldin - tax refunds is the lack of consideration of credit points. There are many employees who deserve various credit points that reduce the total annual tax deduction by thousands of shekels. The best-known credit points are awarded to employees with a physical or mental disability that impairs their ability to work, to parents of children with special needs, to alimony payers, to those who have completed an academic degree and live in a peripheral area. Many employees do not update their employers on time about the credit points they deserve, which often causes the discount points to be disregarded. Do you deserve a discount and didn't get it? You are entitled to receive it in tax refunds up to six years back. Now that you know the two main reasons that create tax gaps and many employees are eligible for refunds, it is important that you also know some practice about checking eligibility, how refunds are credited, and more.
