As the end of the tax year approaches, there is a benefit that continues to go unnoticed by many taxpayers, despite being able to translate into a deduction of up to 400 euros in the IRS. These are the reinforcements made to the Retirement Savings Plans, the PPR, which guarantee relevant tax advantages when carried out before the end of December. According to Pplware, a website specializing in consumption and technology, this incentive continues to be one of the simplest mechanisms to reduce your tax bill or increase your refund next year.
Although the PPR is traditionally seen as a long-term savings tool for retirement, the truth is that the immediate fiscal impact increasingly weighs heavily on subscribers’ decisions. The regime provides for deduction percentages that vary depending on age and minimum amounts of reinforcement, allowing the benefit to be optimized in the annual declaration.
How much can you really receive from the IRS
Calculating the deduction is simple. According to Pplware, anyone under 35 can recover up to 400 euros from the IRS, as long as they invest 2,000 euros in a PPR this year. Between the ages of 35 and 50, the limit drops to 350 euros, with a minimum investment of 1,750 euros. From the age of 50, the maximum deduction is 300 euros and requires a top-up of 1,500 euros.
These values function as a maximum ceiling and not as guaranteed amounts, as the deduction is equivalent to 20% of deliveries made. Therefore, the taxpayer only reaches the maximum amount if he makes the corresponding reinforcement. According to the same source, this tax advantage only applies to contributions made before the legal retirement age, with subsequent reinforcements being excluded.
Couples can double the benefit
The regime allows couples to obtain two deductions, as long as there are two distinct PPRs. According to the publication, in a joint PPR the deduction does not double, while two individual plans allow both to enjoy the tax benefit.
Furthermore, reinforcements above the necessary amount do not have an additional impact on the IRS, although they continue to reinforce the subscriber’s savings.
Attention: some PPR do not entitle you to the benefit
A little-talked-about detail can make a difference. Anyone who subscribes to a PPR with the possibility of free redemption automatically loses the right to a tax deduction. According to , this type of product does not meet the long-term commitment requirement that justifies the benefit, being treated as a simple financial investment.
It is also important to remember that early redemptions outside the conditions stipulated by law may require the return of deductions received, plus interest.
A simple gesture that can reduce your tax bill
The proximity of the end of the year tends to intensify the demand for PPR, not only as a savings instrument, but as an immediate way to alleviate the tax burden. According to the publication, this benefit continues to be one of the most direct ways to recover part of the IRS paid, especially for those looking to balance their budget at a time of persistent inflation.
Reinforcing the PPR before December 31st could, therefore, become the ultimate savings gesture of the year and guarantee a deduction that many Portuguese still miss.
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