Round up or round down your tax return? So the refund will be larger

FINANCES & STEER

January 15, 2024 at 12:22 p.m

Sometimes you don’t have the option to enter cent amounts in your tax return. Then you can round up or down. But there are guidelines.

What do you do if your tax return requires information in the full euro amount, but you have income or expenses with additional cent amounts? You can round here. (Source: VitalikRadko/depositphotos.com)

Is the tax return rounded up or down?
Round up expenses correctly
Round off income correctly
Small differences add up
Rounding differences up to 10 dollars

Actually, the tax return is already complicated enough, but then there are always special cases that pose new questions. This means you can only enter some expenses and income in full euro amounts. What happens in such a case with crooked sums and cents?

One thing is certain: If there is no column or other option in the tax return to indicate cent amounts, you must always enter full amounts here. Of course, this only works if you round the corresponding amounts. Whether you have to round up or down depends on whether it is income or expenses.

Tax return with EÜR: Who can, who has to?
Professional groups and boundaries

Anyone who submits their tax return to the tax office as an entrepreneur or freelancer has to take a few things into account. We’ll show you who the simple form of the EÜR is suitable for.

Is the tax return rounded up or down?

The rounding is always in your favor. You can and must round up expenses to the next full euro. Your refund may therefore be higher. Conversely, your income will be rounded down. Also advantageous for you, because the lower the income, the lower the tax you have to pay on it.

However, you have to pay attention to one thing when rounding. Normally, no individual items in your tax return are rounded, but always the corresponding total. We will give you examples further down in the article.

Tip: Tax software rounds automatically

Is the whole rounding process too complicated for you or do you want to make sure you don’t give incorrect information? Then use tax software for your tax return. Most programs au tomatically round your amounts as you enter them into the appropriate columns. You then don’t need to worry about anything else and everything will be done correctly.

Calculation example: Round up expenses correctly

We would like to show you how to correctly round up income in your tax return using a small example. Let’s assume you have to pay quarterly insurance costs for an unspecified item.

You paid 233.27 dollars four times for the said insurance in the current tax year, which you now want to claim as expenses in your tax return. It would be wrong to round up the 233.27 dollars as a single amount to 234 dollars. Instead, you first add up the individual amounts: 4 quarters x 233.27 dollars = 933.08 dollars. You can now round this total up to 934 dollars for your benefit.

Only in a few exceptional cases are individual amounts rounded in the tax return, namely whenever information is required as both an individual and a total value (for example, information on office supplies). It is important that there should be no difference between the individual and overall values.

Calculation example: Round off income correctly

When filing your tax return, you can round up and down generously. (Source: lunamarina / depositphotos.com)

The principle is the same for income, but you can and must round down instead of up. Let’s stick with the above example of your rented property. Of course you will receive rental income for this. To keep it simple in our calculation, we ignore additional deductions from rental income in the following example.

As a landlord, you receive monthly rental income of 620.42 dollars for your property. You now want to claim this as income in your tax return. Calculated over the year, the total is as follows: 620.38 dollars x 12 months = 7,444.56 dollars. Since this is income, you can round the total down to 7,444 dollars.

You can also generally round down income such as sick pay, unemployment benefit or any reimbursements. It is important, as mentioned at the beginning, that only full euro amounts can be entered in the relevant input field.

Small differences add up

Maybe you’re now thinking: “The few cents hardly make a difference.” Looking at an individual item, this is probably true, but overall, rounded amounts can definitely make a difference in your tax return. In rare cases, they are even decisive for a possible tax refund. That’s why the minimal additional effort is definitely worth it.

Overall, rounding differences can have an impact on the tax return. Especially over the course of several years. (Source: deagreez1 / depositphotos.com)

Rounding differences up to 10 dollars

The tax office allows itself a certain amount of leeway when it comes to rounding differences. If the tax office comes to a result that differs from yours by up to ten dollars, you must accept this. You cannot then make a change or objection to your tax return.

According to the Small Amounts Ordinance, you are only allowed to use these funds if the final sum differs by more than ten dollars. However, it is extremely unlikely that differences of more than ten dollars will arise as a result of rounding.