There is still time left in the year to either increase or decrease the amount owed in taxes the following year.
It is crucial to keep track of every expense you incur throughout the year if you want to receive a refund from the IRS. As a result, you should constantly request invoices with your taxpayer numbers (Contribuinte). The value it provides to the state through IRS retentions will only then be partially recoverable.
The invoices you request with the taxpayer number will go straight to the e-Invoice. Therefore, you should also verify on this platform whether the invoices have been communicated, whether the amounts are accurate, and whether they are in the correct category by using the credentials of the Finance Portal to access. The majority of invoices will typically already be in their category. You might need to make this adjustment, though, if the trader has more than one CAE.
Not every expense may be written off equally. Most bills are classified as family overhead, with a cap of 250€ for each taxpayer and 500€ for couples (if they submit the IRS declaration together).
For this category, you may write off up to 15% of your VAT-related expenses for dining out, lodging, salon and hair services, vehicle maintenance and repair, and veterinary visits. Additionally, you can write off a portion of your gym and sports instruction costs.
To be able to reduce your tax liability, you must be aware of every deduction that may apply. Find out what you can still do to boost your refund or lower your payment.
Education
You can reduce your tax liability by deducting the cost of your household's education from your income. You may deduct 30% of the supported amount, up to a maximum of 800€, when seeking an invoice with a taxpayer number for these expenses. In other words, you need expenses totaling 2,667€ in order to exceed this cap. Education-related costs could include:
Tuition;
Books and textbooks;
Monthly fees for nurseries, pre-schools and schools;
School meals.
Additionally, displaced students' income and expenditures may be deducted. Since all students under the age of 25 who attend a school more than 50 kilometres from their home are considered to be displaced students. It is necessary to have a rental contract in order to write off these costs on the IRS. Additionally, the landlord is required to register the rental agreement on the Finance Portal and state on income receipts that the payment is for the rental of a displaced student.
Health
You should also take advantage of the chance to lower your tax bill if you still have an appointment or need to visit the pharmacy before the end of the year. The IRS allows tax deductions for medical expenses. 15% of the annual amounts supported, up to a maximum of 1,000€ per household, may be written off. As a result, you may write off costs for:
Consultations;
Surgical interventions;
Hospital admissions;
Treatments;
Medical Supplies;
Prostheses;
Orthodontic appliances;
Glasses (including frame);
Health insurance, etc.
It is crucial to keep in mind that in order to qualify for the deduction when using invoices with a 23% VAT rate, the prescription must always be linked to the invoice.
Real estate
Additionally, if you have obligations related to real estate, such as paying rent or interest on a housing credit (for contracts finalised up until 2011), you may be able to take advantage of IRS deductions.
The deduction for rents is 15%, up to a maximum of 502€. However, a cap of up to 800€ is available to people with lesser earnings.
If, during this year, you have relocated further inland to the interior and rented a home, you could also lower your rent-related expenses to up to 1,000€ per month rather than the customary 502€. However, in order to do that, you must have moved your permanent residence to the new rented home.
In terms of loan interest, a 15% deduction is also allowed, up to a maximum of 296€. If the taxpayer in this situation has a lower income, the deduction may be increased by up to 450€. Regularly check your e-Invoice.
Even if you request an invoice with a taxpayer identification number, there is a chance that you will not be eligible for the corresponding deductions. You should frequently check the e-Invoice, which comprises all the invoices issued, to make sure that this does not happen.
Invoices must be transmitted by the 12th of the month following the month of issue from merchants or green receipts (self employeed). After this time, if they are still missing, you must manually enter them. Therefore, keeping the invoices on paper is also crucial.