Best 8 Legal Ways To Reduce Taxes

You can act now to reduce your taxes for next spring, among other things. Here are some ways to do it. We remind you to put into practice basic tips that will reduce your income tax.

How to Pay Less Tax

Are you looking to pay fewer taxes on your next tax return? You might still not see it since you don’t have to settle any accounts with Treasury until spring 2022. However, if you want to reduce your tax bill, it is now that you must act. It is within your power to save taxes, but you must do so before December 31.

These tips, which are always within the law will allow you to reduce your accounts with the Treasury.

Regional deductions available

Many expenses can result in a reduction in personal income tax. Did you know you might be able to claim childcare, education expenses, public transport pass, and domestic help? Also, you may be eligible to deduct rent, water, and energy-saving devices, or installation fees. What are you waiting for?

It is important to first verify the tax deductions to which you are entitled. These vary depending on which autonomous community you live in and then put into action.

Communicate any changes within the family

Notify your employer about any changes in your family situation. If you have a child, divorce, or if there are disabilities, inform them. Personal income tax withholding is determined by family circumstances. It will be as tight as you can.

Payroll for salary change in cash

You can save taxes by getting a part of your salary as salary in-kind. Some benefits, such as health insurance for the worker and his spouse, as well as food vouchers, transport checks, etc., are exempted from income tax.

Donations are deductible. If you take them to the same entities every year, you can get more. Donations to foundations, NGOs, and other non-profit organizations can be deducted at 80% for the first 150 euros and 35% on any additional amounts. This percentage increases to 40% if you give to the same entity the third time and each donation is equal or greater than the last.

Amortize mortgage

You have the right to take tax deductions for the purchase or habitual residence. However, you must pay off your mortgage by the end of the year. If you purchased your house before 2013, 15% of your purchase price is deducted. This amount can be up to 9,040 euros if you paid less, or 18,080 if your spouse and you declare separately. You are eligible to early amortize the amount that exceeds that limit and take full advantage of this deduction.

You should wait until you reach 65 before selling your house

If you are nearing that age and are thinking of selling your habitual home, it is a good idea to wait to make the necessary arrangements. The profit you get from the sale will not be subject to tax.

Pension plans: Save money

Contributions up to 8,000 Euros to a pension plan can reduce the personal income tax bill. However, it is important to choose a good program. Otherwise, it could be a poor investment due to high expenses and low profitability.

Compensation for profit or loss

If you’re an investor and have assets to sell, remember that profits outweigh losses (and vice versa). Take the right steps.

Remember

To avoid any problems, it is important to keep all receipts of deductible expenses (receipts to pay for courses, donations ).

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