The presentation of thetax return – which we can do, as natural persons, or with theform 730 or with theindividual income model – has the aim of making us pay taxes in a manner commensurate with our ability to pay. When submitting the return, the taxpayer can benefit fromtax deductions and reliefs.
These are two different forms of benefits that the law makes available and which can allow you to reduce the amount of tax to be paid to the point of even making the taxpayer a creditor towards the tax authorities. Today we see what tax deductions consist of.
What is the tax deduction
The deduction is a benefit that allows you to reduce the value of the overall income on which the tax to be paid is calculated. In other words, these are expenses incurred that can be subtracted from the value of the income. This reduces the so-calledtaxable base and, consequently, the amount of the tax.
Here are some examples of expenses, also called deductible charges, which allow you to reduce the taxable base of your income:
Social security contributions
Premiums paid for supplementary social security
Donations to religious institutions and other entities
Medical expenses for disability
Periodical allowance paid to spouse
Depending on the expense incurred, you can subtract from your overall income the entire amount of the expense, such as for example in the case of social security contributions, a percentage of it or up to a maximum amount, such as for example forsocial security supplementary, where you are currently entitled to deduct from your income up to a maximum amount of 5,164.57 euros.
Let's give an example of deduction
If your total income is 40,000 euros and you have stipulated a supplementary pension contract to which you have paid 6,000 euros during the year, the the amount that you can deduct from your income is 5,164.57 euros, which is the maximum amount recognized for supplementary social security. In this case the result is that your tax base will amount to 40,000 - 5,164.57 = 34,835.43.
The taxes you will pay will therefore be calculated on this taxable base and not on the initial income of 40,000 euros.
If, however, the sum you pay for the supplementary pension is less than the maximum amount of 5,164.57 euros - for example you pay 4,000 euros - then you can deduct the entire sum.
Clip makes your life easier
Keeping track of the expenses you incur during the year will allow you to make the most of the tax relief tool when filing your tax return. And don't forget that from year to year these benefits may undergo changes with a significant impact on the calculation of your debt or credit position towards the tax authorities.
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