Verify your Danish preliminary tax statement by the year-end 2024 to ensure accuracy and potential adjustments.
Let's Tackle Your Danish Taxes the Smart Way
Denmark's preliminary tax statements, or 'forskudsopgørelse', have been available for taxpayers online for about a month now, starting from the beginning of 2024. Here's why it's essential to review them before the year ends.
Gear Up for the Right Amount of Tax Withholding
The preliminary tax return helps determine whether you, as a taxpayer, might end up with a deficit or refund at the end of the tax year. It functions as a budget, outlining the tax authorities' expectations of your monthly contributions based on details like employment, income, and deductions you qualify for.
If your information isn't updated to reflect your situation in 2025, you may end up paying too much or too little tax unknowingly, affecting your monthly finances.
Why You Should Review Your Preliminary Return Before the New Year
Henning Boye Hansen, a senior consultant at financial services company BDO, explained to newswire Ritzau that reviewing your preliminary return before the New Year ensures that you pay the right amount of tax from the first pay slip in January 2025.
Even though changing details on your preliminary return before 2025 begins won't prevent further adjustments during the year, it helps avoid potential issues.
Saving Money by Correcting Your Preliminary Return Early
According to Elizabeth Frank Nebelong, director of tax consultancy firms Budgetnørden and Budgetskolen, many people don't find out that their preliminary statement isn't correct until March, when they get their annual statements. However, correcting it before January 1st can help you avoid paying interest on any potential tax deficit, as interest is applied from January, even if you discover a potential deficit later.
How to Update Your Preliminary Return
To make updates to your preliminary return, simply log on to Skat.dk using your MitID digital ID and access the most recent preliminary statement, labeled as 2025.
- Choose "Ændre forskudsopgørelse" (Change Preliminary Tax Statement)
- Enter updated income figures and deductions
- Submit the revised statement
Remember, this flexible tax system allows you to make multiple updates to your preliminary statement throughout the year to reflect changes in your financial situation. However, these updates should be done before certain deadlines, such as the end of the year or specified dates like May 1 for annual tax returns.
Keep on Top of Tax Withholding
After updating your forskudsopgørelse, monitor your pay slips or statements to ensure the correct amount is being withheld each month. Maintain detailed records of income and deductions to support your declarations if needed.
With this proactive approach, you can avoid the pitfalls of paying too much or too little tax unknowingly, ensuring your tax situation stays under control throughout the year. Happy tax management!
[1] Cryptocurrency Taxation in Denmark
[2] Danish Tax Administration Instructions for Preparing Preliminary Tax Statements
- Reviewing your preliminary tax return, which includes aspects like personal finance and income details, can help ensure the correct amount of tax is withheld from your monthly earnings, given the latest news on Denmark's tax system.
- Early corrections to your preliminary tax return, such as adjusting personal-finance factors, can save you from paying interest on potential tax deficits starting from January, as explained by financial experts like Elizabeth Frank Nebelong.
