The year is drawing to a close and one of the main concerns for anyone who works and has income is how to pay the minimum amount of fiscal tax. Some people are hindered in this by a lack of knowledge, so here are the facts.
IRS is the individual tax that is applied to all workers and there is only one way to reduce it – through deductions. Generally, the following expenses can be deducted on IRS: health, education and school, expenses relating to old people’s homes, house expenses, expenses with equipment for renewable energy, life and personal accident insurance, health insurance and legal advice (lawyers).
Besides expenses, everyone can have fiscal benefits. These include: Habitation Savings Accounts, Retirement Savings Accounts, Share Savings Plan. The VAT on the following expenses are also deductible from IRS: food and drinks, some vehicles repair services, and the repair, renewal and maintenance services of domestic equipment. The limit of each deduction/benefit is explained in the table. Employees and pensioners must submit their IRS form by March 15 and everyone else by March 30.
This month the government is discussing the 2005 Budget and there are expected to be lots of changes regarding the deductions. Expenses relating to legal advice and the Habitation Savings Accounts, Retirement Savings Accounts and Share Savings Plans will not be deductible next year as the government is reducing its own expenses by cutting those benefits.
In the meantime, get to know which deductions you can claim – it is extremely important in order to reduce your tax bill.
• Pedro Simões can be contacted via email: [email protected]