Although tax season may seem far away, preparing in advance can have a big impact on your tax refund next year! Many Portuguese taxpayers only start thinking about deductions when it’s time to file, missing out on potential savings. To maximize your 2025 refund, here are some smart steps to take before the year ends:

1️⃣ Save Your Invoices with NIF

Be sure to request invoices with your NIF (Tax Identification Number) for eligible purchases. Regularly check that these invoices are correctly recorded on the Finance Portal (Portal das Finanças). Staying on top of this now will prevent last-minute stress and ensure you claim all your deductions.

2️⃣ Know Your Deduction Categories and Limits

Different expenses allow for tax deductions, but each category has its limits. Knowing these limits can help you plan your spending wisely to take full advantage of the available tax breaks. Here are some key categories for 2024:

  • Health Expenses: Deduct up to €1,000 for out-of-pocket medical costs like prescription medicines, doctor visits, and health insurance.
  • Education Expenses: Up to €800 can be deducted for tuition, school supplies, and student housing.
  • Housing Expenses: Renters can deduct up to €502 for rental payments made during the year.
  • General Family Expenses: A deduction of 35% of general household spending, up to a limit of €250 per household.

3️⃣ Track Your Year-End Spending

As 2024 draws to a close, review your expenses in each deductible category. If you’re nearing the deduction limits, consider increasing spending in those areas before December 31. This might include stocking up on prescription medicines, paying tuition in advance, or making necessary home repairs that qualify for deductions.

4️⃣ Additional 2024 Tax Breaks to Watch

In 2024, new measures have been introduced that may benefit your tax situation. For example, the IRS Jovem program, offering tax breaks for young people entering the workforce, allows a significant reduction in income tax for up to five years, with specific income thresholds. Make sure to check if you’re eligible for this benefit!

Also, the Energy Efficiency Deduction, which applies to home improvements that reduce energy consumption, provides a deduction of up to €1,000. If you’re planning any renovations, consider those that enhance energy efficiency, like installing solar panels or upgrading insulation, as these can lead to more savings on your 2025 tax bill.

5️⃣ Don’t Forget About Family Tax Benefits

Parents can benefit from childcare expense deductions as well as tax credits for dependents, with special attention to the educational costs that qualify for the above-mentioned education deduction. Keeping detailed records of all child-related expenses can help ensure you claim the maximum possible deduction.

By following these simple steps and staying informed of the latest tax benefits, you can set yourself up for a larger refund in 2025. Don’t wait until tax season—start now, and you’ll thank yourself next year! 💰

For more guidance on optimizing your taxes and claiming every available deduction, feel free to reach out for professional tax advisory services.


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