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Income tax - Business expenses: lump sum or actual expenses (deduction)
Verified 08 avril 2021 - Legal and Administrative Information Directorate (Prime Minister)
Your salary is subject to income tax after deduction of professional expenses (transportation expenses from home to work, clothing specific to the job being performed, etc.). You have a choice between the standard deduction of 10% and deducting your business expenses for their actual amount.
10% flat deduction
The standard deduction 10% is automatically calculated on your salary to account for current work expenses related to your job.
The main current business expenses are:
- Travel from home to work
- Work-site catering costs
- Documentation and updating of professional knowledge.
The deduction shall be at least €442 for each member of the tax household.
Its maximum is €12,652 for each member of the household.
If you choose the lump sum deduction, you have no steps to take. Administration automatically applies lump sum deduction of 10% on your salaries.
Online Declaration
Internet reporting is mandatory if your main residence is equipped with internet access and you are able to make your declaration online.
2021 Online 2020 Income Statement
Ministry of Finance
Before validating your pre-completed return online, you must verify the information provided and, if necessary, correct and complete it. Keep supporting documents for 3 years if requested by the administration.
Paper Declaration
In 2021, you can report your income on paper if you are in one of the following situations:
- Your main residence is not equipped with internet access
- It is equipped with internet access, but you are not able to make your declaration online
You will use the pre-completed paper return received between April and June 2021. Depending on your situation, this is the return No 2042 or 2042 C. Declaration #2042 RICI groups major tax credits and reductions.
If you do not receive a print (1st declaration, change of address, change in family situation), you can report online or download the necessary declarations from early May on service-public.fr or www.impots.gouv.fr.
Certain income is to be reported on a separate return. You can also download them online. The main annexed declarations are:
- Form 2044 for the declaration of land income
- Form 2074 for the capital gains
- Form 2047 for foreigner income
Before signing your return, you must verify the information provided and, if necessary, correct and complete it.
You do not have to attach supporting documents to your paper return unless they are documents prepared by you (such as a detailed list of your actual expenses). However, keep the documents for 3 years if requested by the administration.
Deduction of actual costs
If you believe that the 10% does not cover your expenses, you can choose to deduct your business expenses for their actual amount.
The deduction of actual expenses applies to all wage income.
You cannot choose the 10% for part of your wages and the deduction of actual expenses, for the other.
However, each member of tax centre may choose the most favourable regime.
Your expenses must:
- Serve your business
- To be paid in 2020
- Be justified (you must be able to provide documents attesting to the reality and the amount of fees).
The main deductible expenses are:
- Transportation costs to the workplace
- Meal
- Business Travel
- Training costs
- Premises and professional equipment.
To calculate your mileage charge, you can use this simulator:
Actual: calculate your mileage
Ministry of Finance
FYI : for electric vehicles, the amount of travel expenses shall be increased by 20 %.
If you choose to deduct actual expenses, you must:
- Enter the amount of business expenses you claim
- Detail your actual costs (specify their nature and amount) in an attached note
- If necessary, add to your taxable remuneration the allowances your employer paid you for professional expenses.
You must keep supporting documents (invoices, restaurant notes, etc.) for 3 years.
FYI : in case of carpooling on your commute, only the amount of the cost that remains to be paid once the share is made can be deducted from the income.
Online Declaration
Internet reporting is mandatory if your main residence is equipped with internet access and you are able to make your declaration online.
2021 Online 2020 Income Statement
Ministry of Finance
Before validating your pre-completed return online, you must verify the information provided and, if necessary, correct and complete it. Keep supporting documents for 3 years if requested by the administration.
Paper Declaration
In 2021, you can report your income on paper if you are in one of the following situations:
- Your main residence is not equipped with internet access
- It is equipped with internet access, but you are not able to make your declaration online
You will use the pre-completed paper return received between April and June 2021. Depending on your situation, this is the return No 2042 or 2042 C. Declaration #2042 RICI groups major tax credits and reductions.
If you do not receive a print (1st declaration, change of address, change in family situation), you can report online or download the necessary declarations from early May on service-public.fr or www.impots.gouv.fr.
Certain income is to be reported on a separate return. You can also download them online. The main annexed declarations are:
- Form 2044 for the declaration of land income
- Form 2074 for the capital gains
- Form 2047 for foreigner income
Before signing your return, you must verify the information provided and, if necessary, correct and complete it.
You do not have to attach supporting documents to your paper return unless they are documents prepared by you (such as a detailed list of your actual expenses). However, keep the documents for 3 years if requested by the administration.