The state does not always give you money you are entitled to unless you demand to pay it yourself. It is therefore advisable to check the tax return carefully every year, both to make sure that everything listed is correct and to be sure that you have not forgotten to list something you can deduct. It may seem like a lot of extra work, but if you can get back thousands more legally, it’s well worth it. In this article we will explain what tax credit you can get on loans and credit cards as well as how you go about claiming it.
Get everything with you
If you have taken out a mortgage and had a helpful advisor in the bank, then you are aware that you are being deducted from the tax for the interest you pay on the loan. The mortgage should be listed in the tax return automatically and is probably rarely wrong, but it is still not something you should take for granted. What is perhaps less well known is that you also get a tax deduction on what you pay on interest and fees for consumer loans and credit cards. The fact that you get a deduction for the fees, which is especially relevant when you take out consumer loans, is something most people are unaware of. In addition, all expenses incurred in connection with the conversion of loans, such as the setting-up fee for bank switching, are deductible. You can even deduct it from the tax if you have hired a tax assessor to get a value for your property.
Is it worth the trouble?
If you have kept a budget throughout the year, it will be easier on the day you are dealing with the tax return. When it comes to tax deductions, the purpose is to arrive at your real income, ie how much you are left with after interest, taxes and fees are deducted. For that reason, it is an advantage for you that you include everything you have of relevant expenses. Included in this is interest on all types of credit. Of this, you can deduct 27% of the amount that represents the actual expenses you have incurred for interest and fees. Don’t forget that both the setup fee and other administrative costs you have been charged. It is important to note that you can only deduct what you have paid. If you have received a debit or debt collection on an outstanding amount, it does not qualify for tax deduction. So it will depend on how much you pay in debt, how much you will get back and whether you think it is worth the trouble. For many Norwegians, it could mean several thousand extra in the wallet they would not otherwise have seen. In addition, no one dislikes the fact that the consumer loan and credit card are in practice a little cheaper.
When your tax return arrives, take the time to check that all interest expense you have incurred is posted. If you have a credit card through one of the largest banks, then the expenses are most likely to be entered automatically. The same goes for mortgages and other types of credit. Make sure everything is correct as you have full responsibility for ensuring that the amounts in the tax return correspond to the reality. If there is something wrong, remove the amount and enter the correct amount. If something is not listed, you can do it yourself. The relevant items, for expenses related to debt, in the tax return are 3.3.1 and 4.8.1. No matter how tempting it may be, remember that it is no use cheating with the numbers, the banks send out annual reports with complete information.
For individuals living in cohabitation, it is extra important to check the details that are pre-filled in the tax return for the above items. If you have shared a mortgage with a cohabitant then it can lead to a little extra job each year. Although you have taken out a loan with the bank together, it is not uncommon for debt and interest to be reported only to one of the borrowers. This means that, as cohabitants, one must distribute debt and interest on both tax returns. You might think that it can be easily solved by figuring out what is a fair distribution, and settling in between when the tax money is on account. Unfortunately, this is a pitfall that one must be aware of, cohabitants must state debt and interest in the tax return that corresponds to what is stated on the bank’s debt note. Spouses do not have to follow these rules, they can share the debt rates as they want. As a cohabitant, however, you can only get a deduction for interest you have paid yourself. If everything is listed on a person then you erase what is stated and list half the amount with each. If you have divided the loan in a way other than half each, then you must remember to add an extra explanation of why this is the case and also be able to refer to an internal agreement.
You choose, of course, even if you just submit your tax return as it is sent to you and hope for the best, if not just stick your tongue in your mouth, go through some budgets and bank statements to find out how much tax credit you entitled.