In the process of filling out the Income Tax return, one of the most important aspects is the deduction of expenses, which allows taxpayers to reduce the amount of tax to be paid. In this guide, we explore the main categories of deductible expenses and their applicable percentages and maximum limits.
1. General Family Expenses
Deductible Percentage: 35% of general family expenses (e.g., food, clothing, fuel).
Maximum limit: 250 euros per taxpayer (500 euros for married couples or those in a de facto union who opt for joint taxation).
These expenses include most day-to-day expenses, making it one of the most comprehensive IRS deductions.
2. Health Expenses
Deductible Percentage: 15% of health expenses (e.g.: medicines, consultations, health plans).
Maximum Limit: 1,000 euros.
Important Note: Expenses with VAT at 23% are only deductible if accompanied by a medical prescription.
Health expenses are essential and therefore can be deducted significantly.
3. Education and Training Expenses
Deductible Percentage: 30% of education and training expenses (e.g. tuition, books, school supplies).
Maximum Limit: 800 euros per family.
Exception: The limit increases to 1,000 euros if there are rental expenses for displaced students up to the age of 25.
This deduction is especially relevant for families with school- or college-aged children.
4. Real Estate Expenses
Income:
Deductible Percentage: 15% of rent paid for permanent housing.
Maximum limit: 502 euros.
Mortgage Interest:
Deductible Percentage: 15% of interest on contracts signed up to December 31, 2011.
Maximum limit: 296 euros.
These deductions apply to both tenants and landlords, depending on the contractual situation.
5. Nursing Home Charges
Deductible Percentage: 25% of the expenses incurred by nursing homes.
Maximum limit: 403.75 euros.
For those with dependent family members in nursing homes, this deduction can significantly alleviate tax burdens.
6. Alimony
Deductible Percentage: 20% of the amounts paid as alimony, provided they are the result of a court ruling or approved agreement.
Maximum Limit: The amount considered is up to R$1,758.76 per month and per beneficiary.
Deductible child support helps balance the costs borne by separated or divorced parents.
7. Specific Tax Benefits
PPR (Retirement Savings Plans):
Deduction: 20% of the amounts applied.
Maximum Limit:
Up to 35 years old: 400 euros.
From 35 to 50 years old: R$ 350.
Over 50 years old: R$300.
Health, Life and Personal Accident Insurance:
Deduction: 25% of the amount paid in prizes.
Maximum Limit: 15% of the total value of contributions.
These deductions are ideal for those who invest in retirement or secure their future through insurance.
8. ICMS on Invoice
Deductible Percentage: 15% of VAT paid on expenses in specific sectors (e.g. car repairs, catering, hairdressers, sports activities).
Maximum limit: 250 euros.
This deduction encourages the request for invoices in strategic sectors, promoting the formal economy.
9. Donations
Deductible Percentage: Between 20% and 25%, depending on the type of donation and the beneficiary entity.
Maximum Limit: Up to 15% of the collection.
Contributing to social causes not only helps the community, but it can also benefit your IRS.
Conclusion
IRS deductions are a powerful tool for reducing your tax burden. Understanding the categories and limits that apply allows you to maximize your benefits and ensure you don’t miss out on any savings opportunities. Make sure you keep all receipts and invoices and complete your tax return correctly to take full advantage of these deductions.
For more information or to clarify specific questions about your case, consult an accountant or access the Finance Portal.
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