The close of 2023 is near, and with it the tax year draws to a close. The filing deadline is December 31, but by following a few practical tips, individuals can still reduce the tax burden on their next income tax return. Savings, however, will vary depending on the autonomous community where a person resides.
Tax obligations have risen in recent years due to a number of tax reforms implemented by the administration. The increase has not affected every region equally, and the size of the burden will depend on the city or region. Variations in tax levels have widened the gap between autonomous communities, and the overall savings potential is affected by high taxes, inflation, and broader economic challenges.
For example, income tax has increased by about 1.3 percent, marking the second-highest rise in the euro area. This comes even as five communities announced they would reduce personal income tax brackets. Eurostat data indicates that Spain has experienced a notable growth in the tax burden, even as some regions considered adjustments.
In discussions with regional bodies, representatives have noted a growing disparity between communities like Madrid and Asturias, where the tax rate remains high and reductions have not been enacted. The Association of Tax Advisers has highlighted that the range and value of other important benefits vary, including transportation, family support, and food subsidies. Because of this, several approaches can be applied across most regions to manage the overall tax load.
How can someone save money on the income tax return? Experts warn that savings resources are tightening, making it important to act strategically. Leveraging professional guidance and understanding the available incentives can help maximize year-end savings. Three practical actions commonly recommended are:
– Making an exceptional contribution to a retirement plan.
– Amortizing the mortgage if the home was purchased before 2013.
– Purchasing an electric vehicle before the year ends.
Adopting these measures can influence deductions that appear on the next statement, potentially increasing refunds or reducing the amount owed. Taxpayers should take into account their own personal situation, as eligibility for certain deductions depends on income thresholds and family circumstances. Individuals earning less than a specified amount may be more likely to qualify for certain exemptions, while those with multiple dependents or specific financial arrangements should review local rules to avoid missing eligible benefits. In some cases, benefits linked to social programs or public income indicators can affect the applicable deductions, emphasizing the importance of accurate, up-to-date information and careful planning.
Overall, careful planning and timely actions can matter a lot when the tax year ends. Consulting with a tax professional and staying informed about regional rules can help households make the most of available deductions and incentives, supporting better financial outcomes as the new year approaches.