Loan for income tax equalization

Are you looking for information on the loan for income tax equalization? Which question would you like to have answered?? Is it about the tax deductibility of loans or about interest and late payments?

Our credit advisor on income tax equalization explains what you can deduct and how you save late payments and interest payments to the tax authorities.

Loan for income tax equalization – deductibility

Loan for income tax equalization - deductibility

The deductibility of a current loan in income tax equalization is relatively easy to explain. Interest costs are deductible whenever the loan was needed to generate income. Interest costs for loans with a purely private focus are not deductible. The credit background is important for assessing what is recognized and what is not taken into account in wage tax equalization. It is irrelevant what exactly was financed by credit.

Illustrative example:

A borrower applies for a loan with the aim of buying a state-of-the-art computer system. His business idea is to offer 3D printing, to run an Amazon shop and to generate advertising income via blogs. Apart from the actual use of the computer system as a business basis of the sideline, he demonstrably does not use the computer. In this case, the loan interest would be costs that are fully eligible for business income. (Advertising cost).

If the borrower bought the same computer system for private purposes, the situation is different. Nothing changes in the loan itself. Interest payments are made in the same amount. But, the actual purpose decides on the deductibility. If the hardware is necessary to “paddle” or the 3D printer for the model building hobby, the purchase counts as “private pleasure”. It is not possible to deduct the loan from the wage tax equalization.

It is similar with the loan interest that property owners pay. They would be deductible if, for example, income from renting and leasing arose. It would also be possible to claim interest payments when selling.

Annual payroll tax compensation – no time can be expensive

Annual payroll tax compensation - no time can be expensive

Taxpayers like to be quick with wage tax equalization if a refund is expected. Nevertheless, not everyone feels called to tackle the annoying tax return. Every year, the father of the state earns large sums of money because people “don’t have time” to file their tax returns. If the state can earn money, it usually has no consequences. However, a warning from the tax authorities can be assumed.

This can have several consequences. (Section 3 (4) of the AO, Section 152 AO and Section 240 AO). On the one hand, this can result in an estimate that is unfavorable for the taxpayer. In this case, an additional payment obligation is to be assumed. The tax claim results in the interest on the tax liability and the penalty payment for a delay or delay surcharge.

Taxpayer costs:

The tax offices determine the default surcharge with 1.0 percent of the tax liability per month. In addition, there is 0.5 percent monthly interest.

It is cheaper than hoping for the “grace of the authorities” to quickly apply for a loan to compensate for income tax. For example, if the tax liability is 2,520 USD, the late payment surcharge costs 25 USD per month plus 11.50 USD in interest. – A total of 36.50 USD per month.


For the calculation, the smooth sum is rounded off to the next 50 USD step. The calculation basis would be up to 2,549.99 USD. The default surcharge is payable from the day of the first due date. The same applies to interest. With a rounded tax liability of $ 2,500, $ 11.50 would have to be paid monthly.

Financing at low interest rates – quickly rescheduling tax payments

Financing at low interest rates - quickly rescheduling tax payments

A direct comparison of the financing costs shows how important it is to act quickly with tax debts. For 2,520 USD in tax liability, 36.50 USD would have to be paid per month or 438 USD per year. A complaint was made against the high interest rate, despite the Astro Finance’s low interest rate policy. Unfortunately, the Federal Fiscal Court was right about the tax office’s interest claim. (Ref .: IR 80/10).

For comparison, the installment loan required for compensation could be applied for 2.25 USD monthly interest or 27 USD a year. In this calculation example, tax debtors save $ 411 a year with a loan for income tax equalization. The argument that there was no time for the application would also be untenable. With only two entries (loan amount and term), the loan comparison shows the cheapest loan. It takes about 5 minutes to submit the online application.

If you apply together with Videoident, you do not have to leave the house to apply for a legally binding loan. An employee checks the identity and authenticity of the requested documents via Skype. The examination only takes a moment, then the application is legally secure. The approved loan for the equalization of wages tax could settle the tax debt 48 hours later.

Personal loan for tax liability

Personal loan for tax liability

Most workers get money back from wage tax compensation. It is different with a self-employed person’s income tax return. Self-employed people pay taxes almost without exception, but often have problems with a bank’s loan approval.

The problem of lending a bank loan bypasses self-employed people if a loan for the additional tax payment is applied for privately. Even the desire for a loan for income tax equalization – income tax equalization shows that the entrepreneur makes a profit. Making a profit is the basis of solid repayment ability, which is important for private loans.

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