Tax deductions: what it is and how to save on them

What is tax deduction

The tax deduction is a part of the income with which the state permits not to pay personal income tax. You are either returned to the previously withheld funds, or tax is not charged for a certain amount.

To receive a deduction, you need to be a resident of the Russian Federation and have income that is subject to personal income tax. Accordingly, if you receive a salary in an envelope, do not work at all, or become an entrepreneur in the simplified taxation system, you will not be able to use it.

The financial benefit is not equal to the amount of the tax deduction, it is 13% of it.

You will not be given the entire due amount in full at one time - only what you managed to pay in the form of contributions during the year.

What are tax deductions

Standard

Per taxpayer

Citizens of some categories can receive a tax deduction of 3,000 or 500 rubles each month. The list includes veterans of the Great Patriotic War, liquidators of the Chernobyl accident and others. The list is quite extensive and is given in full in the first paragraph of Article 218 of the Tax Code.

If you can qualify for both tax deductions, the largest will apply.

Per child

The deduction for the first and second child is 1,400 rubles per month, for the third and each subsequent child - 3,000, for a disabled child - 12,000 rubles. The tax deduction is drawn up annually and is valid until the month when the annual income exceeds 350,000. So, with a salary of 35 thousand rubles in the last two months of the year, personal income tax will have to be paid from the entire amount.

If the spouses have a child from a previous marriage, the common one will be considered the third. For a single parent, the deduction can be doubled.

Social

For charity

You can get a tax deduction if you transferred money:

charitable organizations;
non-profit organizations working in the social sphere, in the field of science, culture, physical education, and so on;
religious organizations.

The entire amount donated to charity can be exempted from taxes, but not more than 25% of the annual income.

For education

A tax deduction can be issued not only for studying at a university. This also applies to kindergartens, schools, institutions of additional education, which have a state license. Accordingly, the list includes both the child's music school and the driving school for you.

You can request a deduction at:

own training of any form;
full-time education of your own child and children under guardianship up to 24 years old;
full-time education of a brother or sister up to 24 years old.

The maximum amount for which you can receive a tax deduction is 120 thousand a year for yourself or a brother and sister, 50 thousand - for children or wards.

For treatment and purchase of medicines

You will be refunded part of the taxes if you confirm the payment for the doctor's services and medicines for yourself, your spouse, parents or minor children. There is also a partial compensation for the payment of the voluntary health insurance policy.

The maximum amount from which you can receive a tax deduction is 120,000 rubles per year.

Retirement and life insurance

A deduction is made for contributions:

to a non-state pension fund;
to insurance organizations under voluntary pension insurance contracts;
under voluntary life insurance contracts concluded for a period of at least five years;
on the costs of the funded part of the labor pension.

The maximum amount from which a tax deduction can be obtained is 120,000 rubles per year.

For an independent assessment of qualifications

If you have completed the assessment for a fee, you may be able to recover some of the costs. The maximum deduction amount is 120,000 rubles.

If you are eligible for several social deductions, you can get all of them. But the general limit on the amount will also be 120,000 rubles per year.

Investment

Such a tax deduction can be obtained in three cases:

on income from the sale of securities, if they were owned for more than three years, in the amount of not more than 3 million;
by the amount of funds deposited to an individual investment account within three years, but not more than 400,000 per year;
for income from transactions with securities made on an individual investment account within three years.

Property

You are eligible for a tax deduction:

when selling property;
buying or building a home;
acquisition of a building plot;
redemption of your property for state or municipal needs.

When buying or building housing, the maximum amount from which the tax deduction will be calculated is 2 million rubles. Moreover, it can be obtained from several properties if they were purchased after January 1, 2014.

In addition, a tax deduction is issued for the repayment of interest on a loan for housing or construction, as well as for compensation for overpayments when refinancing these loans. The maximum amount from which the deduction is calculated in this case is 3 million.

If the contract indicates that the object needs completion and finishing, these costs can also be partially compensated. We are talking mainly about primary housing.

You can apply for a property deduction for several years in a row until you select the entire amount.

You can also get a deduction on income from the sale of real estate and not pay tax at all or save significant money on it.

Professional

Certain categories of citizens can receive a deduction by providing documents on expenses. Among them:

individual entrepreneurs under the general tax regime;
notaries, lawyers and other persons with private practice;
citizens who provide services under a civil law contract;
authors and inventors.

Deductions are granted for the full amount of expenses. Entrepreneurs can claim a deduction of 20% of income instead of presenting checks.

How to apply for a tax deduction

Through the employer

In this case, you will receive a financial bonus every month. When calculating the salary, the accountant subtracts the deduction from it and calculates the tax only on the balance.

For example, you have two children and a salary of 40,000 rubles. You draw up a tax deduction, and from January to August (then the income will exceed 350,000 rubles), the accountant will deduct 2,800 rubles from your income and accrue personal income tax only for 37,200 rubles. In a year you will save almost 3 thousand rubles.

To apply for a deduction, you need to provide the employer with an application and a notice from the tax office about obtaining the right to deduct. For paperwork, you need to contact the Federal Tax Service with a package of documents that confirms that you are entitled to a deduction.

Through the tax office

You can contact the tax office to get a lump sum of taxes paid for the year. You can apply for a deduction within three years from the event that gives you the right to do so. There is no such limitation for property deduction. But you can return the taxes paid no more than three past years, and then collect the remainder in the future.

There are two options.

1. Submit a 3 ‑ NDFL declaration

For this you need:

take a certificate at work in the form of 2 ‑ personal income tax or wait for the document to appear on the FTS website, this happens in March – April;
fill out a 3 ‑ NDFL declaration;
confirm the right to deduction with documents.

The package of papers can be taken to the tax office at the place of registration, sent by mail or through your personal account to. The last method is the most convenient.

The FTS must consider the declaration no more than 3 months in advance. The service has another 30 days for a refund.

2. Wait for notification from the Federal Tax Service

From May 2021, a simplified procedure for processing deductions has been in effect. The IRS itself can decide on the basis of information received from the employer, banks and brokers whether you are entitled to payments. With a positive decision in your personal account on the FTS website, you will receive a pre-filled application, which you will need to sign and send to the tax office online. It will be considered within a month, it will take up to 15 days to transfer the money.

This method has several nuances:

It is only suitable for property and investment deductions.
Refunds are only available for expenses incurred in 2020 and later.
Banks and brokers may, but are not required to, inform the tax office of the circumstances that give you the right to a deduction. So far, financial organizations are in no hurry to do this.

In general, now it is better to use the old proven methods for processing deductions. Although it is possible that the system will work effectively soon.

This article was posted on May 6, 2019. In June 2021, we updated the text.