Every year, the same story. One wonders how to pay less taxes, lower taxes, to gain purchasing power. Good news, you will find here the answers to your questions. First, know that there are 3 levers to influence its tax: the deduction (decreases the tax base), the reduction (directly decreases the amount of tax to pay), and finally the tax credit (even principle that the reduction but can be reimbursed by the State if the amount is greater than the amount to be paid). A brief overview of solutions to reduce its tax burden in 2019.
The retirement solution: preparing for the future while lowering taxes
The French basic pension system is the pay-as-you-go system. Although this system is based on intergenerational solidarity, it only allows retired employees to benefit from about 50% of their former retirement income. Setting up a supplementary pension is therefore essential to maintain a decent standard of living. In addition to receiving additional income in addition to your pension, this system allows you to tax a portion of the premiums paid.
The real estate solution: build wealth while lowering taxes
There are many tax exemption schemes that can be operated to reduce taxes. So, invest in real estate under the Pinel law, the De Normandie law or the Censi-Bouvard law … These schemes offer a tax reduction depending on the amount of the investment and the duration of the commitment.
The Non-Professional Furnished Rental Facility (Leaseback) allows renting a well-furnished property while benefiting from fiscal neutrality, thanks to the principle of Reputed Depreciation (ARD). This device allows you to depreciate the property and thus equalize the property income, not to increase your tax.
The financial solution: support French SMEs while lowering their taxes
Two types of financial products are able to make you a tax reduction: the investment in Mutual Fund Investment in Innovation (FCPI) and Investment Fund Proximity (FIP). The state set up several decades ago a tax incentive (tax reduction) for taxpayers who invest in French SMEs and thereby support the economy.
Thus, if you invest in this type of fund, you will benefit from a tax reduction of 18% of the amount of your investment capped at 2160 € for a single person and 4320 € for a couple. This in return for a commitment to hold 5-year units. In addition, you will not be taxed for resale in case of capital gains (excluding social security contributions).
The practical solution: perform energy saving work while lowering taxes
If you have incurred expenses for energy saving work in your main home, you can, under certain conditions, benefit from an advantage on your income tax: the energy transition tax credit (CITE ).
The generous solution: donate while lowering taxes
To be eligible for the tax reduction, donations must be disinterested: this means that there must be no consideration. In other words, they must be recognized as public or non-profit public interest. Article 200 of the General Tax Code specifies the sectors for which donations are entitled to tax reduction. Thus, you can benefit from a reduction of 66% up to 75% under certain conditions, given amounts, within the limit of 20% of taxable income.
The ingenious solution: optimize your return to pay less taxes
Before thinking of setting up strategies for tax exemption, it is important first of all to declare your income and your expenses as accurately as possible. So, do not choose the 10% reduction of actual costs if your expenses far exceed this standard abatement: calculate as close to your expenses! Similarly, depending on the composition of your home, you can play on your family quotient, or deduct the pension you pay to your children.