How to save up to 4,600 euros in the next income statement?

The union of technicians of the Ministry of Finance (Gestha) has offered ten recommendations on pension plans, housing, sale of shares, entrepreneurs, NGOs, affiliations to political parties, disability or work abroad so that citizens save up to 4,600 euros on their next income tax return.

How do pension plans influence?

The technicians explain that it is convenient to make contributions to the pension plans or to the insured pension plans to achieve a tax saving in the income tax return for next year.

However, the year 2020 will be special, since it is the last in which the tax base of the Personal income tax up to 8,000 euros, provided that these contributions do not exceed 30% of income from work and economic activities. In 2021, the draft budget will reduce the limit to 2,000 euros, so if contributions of this type are going to be made it is preferable not to wait for next year.

Deduct for home purchase?

Citizens who bought their main home or made a payment for its construction before January 1, 2013 will continue to enjoy their right to the deduction, as long as they had deductions for said home in 2012 or prior years.

Thanks to this point, taxpayers up to 15% of the invested amounts may be deducted, with an investment limit of 9,040 euros. Accordingly, the technicians remember that “taking into account this ceiling, it may be interesting to make an additional payment, of 4,806 euros on average, to pay off the mortgage before the end of the year to reduce the tax bill by 721 euros “.

How to neutralize income taxation?

The General Budgets law brings a change in the taxation of capital gains, establishes a new rate for the case of taxable bases of savings over 200,000 euros, which will amount to 26%.

However, Gestha recalls that those who sell their house in 2020 will pay taxes on the profits in the next income statement, depending on their amount, between 19% and 23%.

Over 65 exemption?

Taxpayers over 65 years of age, severe dependents, or large dependents are exempt from taxing the gains obtained after the sale of your habitual residence and of any property whose value does not exceed 240,000 euros, as long as the latter is used to constitute an insured life annuity within a period of six months.

Make up for losses with gains?

The technicians remember that the end of the year is a good time to do accounts and compensate the losses generated by an investment fund, shares or financial derivatives with the capital gains obtained, although these cannot be acquired same or similar values ​​in the two months after the sale.

Since 2015 the treasury allows capital losses to be offset, in the event of no earnings, with positive returns on movable capital and vice versa.

Gestha summarizes how to act in that “if there were a positive return on movable capital, it would be advisable to study the materialization of losses on the sale of shares and other equity products. And if there were equity gains, it would be advisable to offset them with negative returns on capital furniture”

When to sell shares?

The union reminds taxpayers to expect their net earnings from work to be less than 16,825 euros monitor that there are no other types of income, such as capital gains from the sale of shares or income from real estate rentals, exceeding 6,500 euros, since in that case they would lose a reduction in income from work that can reach up to 5,565 euros.

What if I work from abroad?

The returns that have been obtained for the work carried out for companies based abroad are exempt from taxation with a maximum limit of 60,100 euros per year. Although the Treasury technicians add that the deduction will be possible as long as a tax of an identical or analogous nature to that of personal income tax is applied in the territory in which they work (that is not a paradise fiscal).

What if I’m charitable?

This item increases with respect to other exercises. The Government approved a increase in the tax deduction for donations with effect from January 1, 2020, up to 80% of the first 150 euros donated and 35% of the rest of your contributions, which increases to 40% if the amount donated to the same NGO has not decreased in each of the last three years.

What if I am from a political party?

The membership fees for political parties and donations represent a 20% deduction, up to a maximum of 600 euros. Gestha recalls that next to this item is the deduction for union fees and professional associations, up to 500 euros, and the legal defense costs of litigation in the labor relationship with the limit of 300 euros per year.

How does helping an entrepreneur affect?

The IRPF law established since September 29, 2013 an incentive in favor of ‘business angels’ or people interested in contributing capital to start an activity.

Gestha explains the item: “The deduction for these investments is 30%, in the state share of personal income tax on the investment made when subscribing the shares or participations of the company, with the maximum deduction base being 60,000 euros per year , limited to one participation, together with their spouse and family members up to the second degree included, never exceeding 40% of the entity’s capital and whose equity may not exceed 400,000 euros at the beginning of the entity’s period “.