What to do about your taxes | End of year tax tips 2023
Tax tips 2023 – At the end of the year, the to-do lists are overflowing. Buying presents for St. Nicholas or Christmas, coming up with good New Year’s resolutions and, of course, the preparations for a new tax year. Unfortunately, we can’t help with the first two, but taxes don’t have to be much work. Take a moment to run through these end-of-year tips and before you know it, you can cross that task off your list!
7 end-of-year tax tips for 2023
1.
Do you live together with your partner? Be sure to arrange a tax partnership before the end of the year to receive tax benefits for the past year.
In other words, You can save taxes by applying for a tax partnership. However, You need to have a partner, live with them and sign a co-habitation contract .
2.
Is it more beneficial to receive annuity payments in 2023 or 2024? In the new year, tax rates are lower. If your income is under about €38,000, it could save between 1.45% and 16.37% in taxes.
In simple terms, it depends on your income whether the rates are more favorable in 2023 or 2024. Of course, one of our advisors can have a look at your situation as well.
3.
Do you have your capital in a regular bank account or is it in stocks? This can make a big difference for estate taxes. January 1st, 2024 is the new cut-off date for these taxes and everything you own at that time will be counted. The last weeks of 2023 is a good time to think about making extra mortgage payments or making a gift to family, for example.
So in short, it could be wise to make certain transactions before the end of this calender year to lower your assets on January 1st, 2024 in order to avoid some wealth tax.
4.
Are there any deductions you want to take advantage of? Don’t wait until December 31st. Not all banks process transactions within a day, so the transactions won’t be visible until January 1st or 2nd. Thus, these would not be deductible in 2023.
That would be a shame. You’ll think you’re on time with the deductions, but then your bank processes it just too late. So it’s best to do it about a week in advance.
5.
Did you receive a gift for your own home in 2021, and haven’t spent it yet? Do so before 2024. This way you can take advantage of the gift exemption for your own home. As of the new year, gift exemption will be scrapped.
For example, if your parents made a gift for your new home and you use it in 2023, you don’t have to pay taxes on it (if you stay below the tax-free threshold). If you wait to use it till 2024, then you do have to pay taxes on it.
6.
Haven’t yet filed a tax return for 2018? Do so by December 31, 2023, as it is no longer possible after five years.
Around April everyone files their tax returns and a few months later you’ll get a letter saying how much money you’ll get back or still have to pay. If you expect a refund for the fiscal year 2018, don’t forget to file your tax return before the end of this year.
7.
Want to buy a house soon? Just wait a little longer, especially as a first-time buyer. Because the exemption from transfer tax is going up. How it used to be only up to €440,000, from 2024 it will increase to €510,000.
In short, when you want to buy a house and your budget is above €440,000 but up to €510,000, you better be patient. After all, starting 2024, you won’t have to pay transfer tax and that will save money to buy new furniture.
We are happy to help!
Do you still have questions after reading this? Totally understandable. Luckily, we can help! Feel free to contact The Tax Savers, let us answer your questions, and you’ll be back to focusing on all the presents and New Year’s resolutions before you even realize it.
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