Loans are taken out for a variety of reasons. Most of the time, a wish or project is to be put into practice that has been planned for a long time. But spontaneous purchases and investments that exceed your own saved capital are also a good reason for taking out a loan.
A little less common, but despite all of this is always a topic, is the loan for income tax equalization. It may become necessary if too little tax has been paid to the tax office and the latter is now pressing for compensation. Since the office only approves a deferral in very rare cases and usually insists on the settlement very quickly and intensively, many consumers are forced to resort to a loan in the absence of liquidity. Because if the tax office is not served, this can quickly order an enforcement order. And then either the bailiff is at the door or the account or wages are seized.
Why does wage tax compensation have to be?
Income tax compensation is actually recommended for every employee. This is the only way for the tax office to reclaim overpaid taxes. The adjustment is always made at the end of the year for the past year.
However, it sometimes happens that the employee does not get money back, but that the tax office makes claims due to the wage tax equalization. This can happen, for example, if the marital status has changed in the course of the calendar year, children have reached the age of majority and thus the child allowance ceases to exist, or if sick or disabled family members have been cared for and looked after at home in advance and this fact is no longer present. The tax office can then withdraw and offset the tax relief that was previously available. Not infrequently, this results in a tax liability of several hundred or even a thousand USD, which then has to be paid to the tax office. With a loan for income tax equalization, this is easily possible.
Taking out a loan for income tax equalization
A loan for income tax equalization is actually quite easy to take up. The mere fact that the borrower is an employee ensures that banks are very open to a loan. If there is also the fact that private credit checker has not saved any negative entries, there is nothing standing in the way of a loan for wage tax compensation.
An installment loan is usually taken out in order to pay the debts to the tax office. This is available from all banking houses and is offered without any purpose limitation. As a borrower, you do not have to tell the bank what the money from the loan is to be used for. On top of that, the loan amount can be adjusted up to the USD from the wage tax liability. So there are no fixed loan amounts that have to be taken out with an installment loan, but the borrower can determine the loan amount as freely as the amount of the monthly installments. The term of the loan is then based on this and, in the end, the amount of the annual percentage rate.
The rule applies here: the shorter the term and the better the borrower’s creditworthiness, the lower the effective interest rate, which includes all interest and fees relating to the loan for the equalization of wages tax. If you search a little and make a comparison with the help of a comparison calculator, you can find offers that go with an effective interest rate of less than 3 percent.
Can the wage tax equalization be rejected?
Many employees already know in advance whether they will get money back from the tax office if they are compensated for wages or if they have to pay money to the tax office. Some of the “postpayers” therefore try to avoid the compensation and simply do not seek it. However, this makes less sense, since the tax office will make the compensation in any case and then demand the money. There is no point in denying wage tax compensation if you know that an additional payment is due. Because in the end you have to pay in any case – no matter who calculated the difference.