2023 ACTUAL EXPENSES. The actual expenses regime may prove to be more attractive than the 10% flat-rate allowance on your tax return. Calculation, meal costs, mileage scale... We take stock.
[Updated May 24, 2023 at 3:56 p.m.] Actual costs represent all expenses incurred by an employee for their professional activity. They include, among other things, meals, daily journeys and other expenses related to the employee's activity (to be entered on the tax return). If you choose this option, be aware that it is mandatory to keep all the supporting documents to prove that the expenses incurred are included in the calculation and correspond to the employee's job. These invoices may well be claimed from you by the tax authorities. The amount of the actual costs is to be entered in boxes 1AK to 1DK of your tax return. Please note that they should not be subtracted from the amount declared in boxes 1AJ to 1DJ, the tax authorities take care of this automatically. If you do, the amounts will be skewed. These boxes are accessible in step 3 of the online tax return, just after checking "Salaries, wages" and clicking on "next".
Do you think you have spent more than the 10% fixed allowance ceiling for your professional expenses (13,522 euros) during the year 2022? Good news for you, it's time to declare this income for its real amount thanks to the real expenses. But then, how to calculate them? Let's take the example of your mileage costs. Let's say you have a vehicle with a fiscal horsepower of 4hp and drive 15,000 kilometers per year as part of your job. In this case, the calculation of the mileage allowance is as follows: 15,000 (the distance) x 0.340: 5,100 euros. Added to this is a bonus amount of 1,330 euros, i.e. a total of 6,430 euros to be deducted from your 2022 income on your 2023 tax return. A significant financial windfall, especially in these times of galloping inflation.
Home-to-work transport costs, meal costs... Each of the expenses that you will indicate must be necessary for your professional activity, and strictly for it, and justified, with supporting expense reports and invoices. Here are some examples of allowable and deductible business expenses:
“There is often misunderstanding between the tax administration and taxpayers,” noted Frédéric Douet, professor of tax law at Rouen Normandy University. "The only deductible costs are those which are necessary for the professional activity. This means that there must be a close relationship between the expense and what it provides to the employee in the context of his professional activity".
The difficulty is therefore to determine whether the expenditure is necessary or not. However, if it is sometimes obvious to you, it will not necessarily be so for the tax authorities, who are likely to control you. Another major issue: evidence. You must be able, if the tax authorities ask you to, to provide all the supporting documents for your professional expenses. This is often where the shoe pinches.
"The advice that should be given is to have a sort of journal in which taxpayers record each expense, the object, the amount, the means of payment", recommends Frédéric Douet. Does your employer already reimburse you for expenses? Employment expense allowances and reimbursements must be included in your wages if you opt for actual costs. "In return, you can deduct all of your expenses incurred in the course of your professional activity", we explain on the tax site.
Whether you decide to complete your tax return online or via the paper form, you have the option of declaring your professional expenses for their actual amount in box 1AK to 1DK, in the section reserved for wages and salaries. Bear in mind that you will have to detail these costs, on plain paper if you have opted for the paper form, or via an explanatory note for taxes if you are declaring on the Internet.
Remember to add in boxes 1AJ to 1DJ the reimbursements for professional expenses from your employer. You do not have to attach all your invoices, receipts and other certificates, but each supporting document must be kept for at least 3 years.
Bear in mind that, except in exceptional circumstances, you cannot deduct your meals on wheels expenses. The method of calculation then depends on where you eat:
Telecommuting may have resulted in the payment of benefits from your employer. As part of the crisis, Bercy has announced that they are exempt from tax within the limit of 2.5 euros per teleworked day and 550 euros over the year (read below). If you have worked every day for seven months at home, or 168 days, the exemption limit will then be 420 euros, calculated the newspaper Les Echos (2.5 x 168). Keep in mind that if your employer paid you an allowance greater than this amount, you will have to add the excess to your taxable wages if you are unable to justify it. But concretely, what are the options? We summarize them:
"When the employee opts for the deduction of actual and justified costs, the costs related to teleworking at home can be deducted up to the amounts retained for the exemption from the flat-rate allowance indicated above", can we read in the Practical tax guide. “However, the actual costs may be deducted for their exact amount if this is more favourable”. Please note that meal costs for teleworked days are not eligible for deduction.
The tax administration has produced a Frequently Asked Questions (FAQ) dedicated to the health crisis, which you can find on the website of the Minister of the Economy. It lists all the costs, in particular those related to deductible telework, here they are: communication costs (other than mobile phone costs) - such as subscription or subscription to an Internet offer -, mobile phone costs (subscription , acquisition of a mobile phone), home-work travel expenses, expenses for supplies and printed matter: (ink cartridges for example or reams of paper), expenses related to the use of private premises (water , electricity, etc.) calculated on a pro rata basis "of the area used in a professional capacity compared to the total area of the accommodation AND the teleworked working time" and the cost of acquiring furniture and computer equipment. Be particularly vigilant, because if it seems obvious to you that telework has generated additional costs, it is not necessarily the same in the eyes of the tax authorities.
Keep in mind that there is no real cost simulator as such, except for the mileage cost schedule allowing you to estimate your only travel costs: here. This means that you will have to calculate everything yourself, and above all, supporting evidence.
The calculation to make the choice between a flat rate deduction of 10% and the deduction of actual costs is essential. It can turn out to have serious consequences if you are wrong. You must be familiar with all the expenses that can be deducted in order to do the calculation and then your choice.
If you declare significant income, we advise you to opt for the 10% allowance. For example, if you declare 100,000 euros in salary, the allowance will be 10,000 euros. It is very rare that the actual costs amount to this amount. The deduction of actual expenses is generally favored by taxpayers with more modest incomes who incur travel expenses to get to their place of work.
If you use a vehicle, you can choose between two calculation methods to assess your travel expenses. The first consists of a fixed assessment. To do this, you can use the scales of mileage costs, provided each year - generally in March - by the tax authorities. They take into account the power of the vehicle and the number of kilometers travelled, and include the various costs (depreciation of the vehicle, fuel, insurance, etc.). As a reminder, the tool for calculating your mileage costs is available here.
The second option is to declare all your expenses yourself. It is necessarily more difficult, since you must include the following costs:
Remember that these scales are calculated according to the power of the vehicle and the number of kilometers traveled. They take into account in particular the depreciation of the vehicle, repair and maintenance costs, tire costs, fuel consumption and insurance premiums. It is possible to add loan interest in the event of the purchase of a vehicle on credit, toll fees and parking fees. These travel expenses relate in particular to transport from home to the place of work and transport during working hours.
Since 2021, the amount of travel expenses calculated on the basis of these scales has been increased by 20% for electric vehicles
You will find below the kilometer scale applicable to cars for the year 2023:
Note: if the taxpayer has an electric car, he benefits from a 20% increase on the travel expenses he can deduct. A first.
Here is the 2023 kilometer scale corresponding to scooters and two red ones up to 50cm3:
Please note: as with cars, taxpayers who drive an electric scooter or motorcycle benefit from a 20% increase in travel expenses to be deducted from their income.