The Model 145 is a form of the Tax Agency related to the Income Tax of Individuals (income tax) through which the taxpayer notifies the payor (usually your company) and their personal and family situation, which will determine the income tax withholding percentage that is applied to your payroll.
What is model 145 for?
It is a document that will be key in your income statement for that year, which you will present the following year since it will be used to calculate the income tax withholding that will be applied to your payroll each month. Hence, the precision with which you complete form 145 will be essential to receive a higher or lower net salary.
Your payer, that is, the company you work for, is obliged to withhold a percentage of your income in anticipation of the taxes that you will have to pay in the income statement. In this sense, your family situation (if you have dependents or are a large family), or personal (for example, if you have a disability), will influence when establishing the retention percentage.
Who has to fill out form 145 and when?
The most common is that you complete form 145 when you start working in a company, as well as when there is any change in the personal and family circumstances that you had previously communicated. In fact, the communication of data must be carried out before the first day of each year or the beginning of the contractual relationship with the company, reflecting your personal and family situation at that time.
However, as many employees forget to inform the company about these changes, do not know what they should do or do not know how to do it, many companies usually ask their workers to complete it at the end of the year, to collect the variations that may have produced and that may lead to a change in personal income tax withholding on your payroll.
If there are no variations in family or personal circumstances, it will not be necessary to repeat the communication of data to the payer each year.
Presentation in case of data variation
If your personal and family circumstances change once form 145 has been presented, and these imply a lower type of retention, for example, the birth of a child, you will be able to present the model again. The modifications will take effect from the date of communication, as long as there are at least five days left for the preparation of the next payroll.
If there is a change in your personal or family situation that implies the application of a higher type of withholding, you must notify it within 10 calendar days from the moment of the change. The new income tax withholding percentage will be applied to the next payroll, as long as there are at least five days left for its preparation.
What happens if form 145 is not presented?
If you prefer not to communicate any of the data requested in form 145 to your payer, the withholding of personal income tax practiced by your company could be higher than that which corresponds to you. In this case, when presenting the income statement for that year, if you have withheld more money than would be due to your circumstances, you could recover the difference.
Also, keep in mind that if you include false, incomplete or inaccurate information in form 145, or do not communicate variations in your personal or family situation that, if known by the payer, would have determined a higher withholding, you are committing a tax offense that can be sanctioned with a fine of 35% to 150% of the amounts that you would have stopped withholding for this reason.
Remember that if there is any incorrect information in form 145, it will be you who has to assume the consequences and not the company, whose duty is to correctly calculate the retention percentage based on the information you have submitted.
How is form 145 filled out?
Form 145 is relatively easy to fill out and consists of seven sections that will serve to clarify your personal and family situation to the company.
Section 1: identification and family situation
This section begins with your personal data, that is, your identification with basic information such as name, surname, ID, and date of birth
- Family situation: identity up to three possibilities. You only have to check one option and it has to be the one that describes your status.
- Disability: you must check the corresponding box if you have a degree of disability greater than 33% and less than 65%, equal to or greater than 65% or if you need help from third parties or have reduced mobility.
- Geographical mobility: you will mark this point in the event that, being previously unemployed, you have found a job and have had to move your habitual residence to a new municipality.
- Obtaining income with a generation period of more than two years during the five previous tax periods: you must check this box if, for example, you were fired in 2017 and you agreed that compensation would be paid to you during that year and the next.
Section 2: children and other descendants
You must fill in this section with the corresponding information if you have children or other descendants (for example, grandchildren), under 25 years of age or disabled of any age, who live with you and do not have an income of more than 8,000 euros per year.
If the descendants live only with you and there is no joint custody, that is, in the case of single-parent families, you must check the box “Total count of children or descendants”.
Section 3: ancestors
This point is reserved for ascendants (parents and grandparents), over 65 years of age, who are in your charge and who do not have an annual income exceeding € 8,000. Ascendants with a disability who live with you, even if they are under 65 years of age, must also be entered here.
Section 4: pensions and annuities for food
In the event that you have to pay alimony to your children or a compensatory one to your spouse, you must indicate it in this section, provided that these are established by court decision.
Section 5: a deduction for external financing for the habitual residence
This section of model 145 must be marked if you make any type of payment for the purchase or rehabilitation of your habitual home, using external financing, that is, through a mortgage. Of course, you only have to fill it in if you bought the home before 2013 and if you do not earn more than € 33,007.2.
Sections 6 and 7: signature, date and acknowledgment of receipt
The last two sections refer simply to the inclusion of the signature by the company and the worker. In this case, an acknowledgment of receipt is added, because the obligation to withhold corresponds to the company and it is important to reflect that you have delivered form 145 so that it can do so according to the data contained therein.
Where is form 145 to be presented?
Form 145 is not presented to the Tax Agency but is delivered complete to the paying company or entity. The company will keep a copy of it to make it available to the Treasury if requested.