It’s not too late to pay less taxes in 2024! What you need to know to reduce the bill.
If you did things on time, you normally sent your tax return last spring, then received your tax notice during the summer. It is therefore already time to think about the next declaration, that of 2024, relating to 2023 income. If you hope to benefit from a tax reduction, you have until December 31 of this year to do so. Parents know this, for example they can deduct childcare costs, but that’s not all!
Tax reduction, tax credit, tax deduction: what’s the difference?
It is not always easy to find your way between all these terms. Although these three measures allow savings in theory, they do not apply in the same way.
► Tax deduction is an amount withdrawn from your taxable income: from overall income (for example alimony) or from one of your category income (deduction of professional expenses from your salaries and wages for example).
► Tax reduction is an amount deducted from the amount of your tax, but only if there is a tax to pay (for example a donation to an association). It does not entitle you to a refund.
► The tax credit is also an amount subtracted from the amount of your tax (for example childcare costs). This tax credit can be refunded in whole or in part if its amount exceeds that of your tax or if you are not taxable.
This gesture of solidarity to be made before the end of December
To qualify for a tax reduction, the donation must be made before December 31, 2023 for the benefit of associations, foundations, works, endowment funds or public or private organizations. “Donations entitle you to an income tax reduction equal to 66% of the amount paid within the limit of 20% of taxable income.“, specifies the website of the Ministry of the Economy and Finance. For example, for a donation of 100 euros to an association, you will be able to recover 66 euros. Your donation would then cost you 44 euros. The choice of the organization to which you make the donation is obviously important, because it is possible to obtain an even greater reduction. If it is a donation to organizations helping people in difficulty, the tax reduction is in effect increased to 75% for a donation of an amount less than or equal to 1000 euros.
What other ways to save on your taxes?
There are other methods which allow you to benefit from a credit or a tax reduction: the installation of a charging station for electric vehicles in your main and/or secondary residence (75% tax credit). tax), investment in an investment fund, deduction of professional expenses, investment in SMEs, and even forestry investment, etc.