When -300 can equal +1300

Posted on my Jacob's Blog and the Oulu CHAFF Blog.

This is yet another mathematical puzzle which is solved very easily for your benefit.

Kannan and me.

When Kannan approached me with his tax return, there was a demand for tax to be paid of around € 300.

I had asked him to maintain detail personal accounts, as is specified in the book "Handbook for Survival in Finland" that Annikki and I had written and published in 1994. The logic of our advice was that only if you know your outflow, can you budget your life.

Kannan had kept meticulous accounts. Using the Google Docs facility, he sent me his accounts and also his tax return forms, from Rauma, over the internet.

I studied them carefully based on all the tax laws that I am still aware of. I am certainly not up-to-date, as for many years, maybe 10, Annikki and I have not had to fill in any tax returns.

Kannan was quite unbelieving that what I claimed for him would pass the scrutiny of the tax office. He was worried that he would be caught for some form of offence of over claiming (tax evasion) his legitimate tax deductible expenses (tax avoidance).

Yesterday evening, I had an excited call from Kannan. He had just received his final tax return statement. Even with his limited knowledge of Finnish, he could read a line at the end of the statement that said he was receiving € 1300 + as his tax return in December of this year!

A turn around of € 1600 +.

But I was not happy, as my target for Kannan at the beginning of last year had been € 5000 as pension savings and € 2700 as his tax return! A net of € 7700.

Well, hopefully he will follow my advice this year and generate that sort of savings this year.

Those at CHAFF will remember that I held a session on filing of tax returns at one of our meetings. I wonder how many of you followed the advice given and how many of you achieved this level of tax refunds?

Do let me know your successes as your stories can motivate others to a financial discipline which helps beat the horrendous inflation that is occurring here in Finland.