How to minimize your taxes by saving for retirement

How to minimize your taxes by saving for retirement

Each member of the tax household is entitled to their own ceilings depending on their income. Yuri Arcurs peopleimages.com/Kirsten D/peopleimages.com – stock.adobe.com

OUR ADVICE – The tax benefits of PER vary depending on your tax bracket. A few recommendations for the right decisions.

A Retirement Savings Plan (PER) has the dual benefit of preparing for retirement while reducing income tax. Each amount paid allows you to reduce your total taxable income by the same amount. Logically, the higher the marginal tax rate, the greater the tax savings. Paying €5,000 into the plan reduces income tax by €550 if the marginal tax rate is 11%, €1,500 if it is 30% and €2,050 if it is 41%.

Please note that the tax benefit given on entry is reversed on exit when the savings are withdrawn. However, this deduction is not unlimited. Payments made to the PER in 2023 are deductible up to 10% of the income from the activity received in 2022, without exceeding €32,909 (€81,385 for freelancers). PER holders who receive little or no professional income can deduct up to €4,114 in 2023.

If the annual cap is not enough, it is possible…

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