Thousands of Portuguese taxpayers are being confronted this year with reimbursements of lower IRS than usual or, for the first time, with the obligation to pay tax. The situation is generating surprise among workers, who have shared their complaints on social networks. Anyway, there is a solution not to have to pay IRS next year.
Retention at source explains the differences
According to the site, the explanation for this phenomenon is in the way the source retention was made over the past year. Despite the various warnings left by experts and the order of certified accountants’ own order, many taxpayers were not prepared for this difference at the time of IRS hit.
In 2023 the government changed the retention tables at the source, which led to that in months, such as September and October, most workers almost had no salary withdrawals. At the time, this monthly income clearance was well received, but few put this money on the way to face the tax now.
How does retention at source work?
The retention system at source acts as an advance of the tax to the state, made monthly. As the same source explains, “If I did not do such retention at the source, now I would have to pay at once two thousand, three thousand or four thousand euros and that would be a problem.”
At the end of the fiscal year, the tax authority makes the final determination to verify that the taxpayer retained more or less than the tax amount due. If you have paid more, you receive a refund; If you paid less, you are required to pay the difference. “Reimbursement has never been a gift or compensation by the state,” reads the published explanation.
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A Practical Example of Accounts
To illustrate the situation, an example was presented with simplified values. A worker who wins 1,381 euros gross should retain 2,165 euros over a year.
However, because he retained less in the months in question, he ended up only 1,861 euros. Made the final accounts, instead of receiving 663 euros of reimbursement, it received only 361 euros.
It is important to note that this difference does not represent a financial loss. As the accounting accounts clarifies, “the difference was in your bank account, it did not lose that money.” The question is the expectation created around the reimbursement value, which this year is inferior to many.
There is a solution provided for in the law
For those who want to avoid future surprises and ensure a higher reimbursement, there is a solution provided for in the law. Article 98 of the IRS Code allows workers to ask the employer to retain a rate higher than legally required. “Income holders can choose to retention the IRS at an entire rate higher than that is legally applicable,” the diploma specifies.
Recommended measure for specific cases
Thus, a worker with 1,500 euros gross, who currently retains 14%, may ask to retain 26%, 27%or more, thus ensuring a higher refund next year. However, this decision implies receiving less money every month. This option is particularly recommended for those with variable income, such as workers with two jobs or with green receipts.
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