The payment of taxes is an obligation of all citizens, whose objective is to contribute to the improvement of society. For greater savings, we can try to pay fewer taxes through some formulas.
Each citizen pays a series of taxes that are destined to the public coffers of the State to be able to pay for public services. Both natural and legal persons must comply with these taxes set by the State to finance public needs.
We must make a differentiation between taxes, fees, special contributions, and taxes.
The first of them are economic benefits that citizens are obliged to pay by law. There are three types of taxes: rates, special contributions, and taxes.
The fees are payments that are derived from the administrative action that individuals request for our benefit.
Special contributions are payments derived from a public activity that satisfies a collective need and produces a benefit for certain individuals.
Finally, taxes are the most important because they generate the most public revenue. These taxes are mandatory without any specific consideration and are based on the economic capacity of citizens. To determine this economic capacity, the State looks at wealth, income, and consumption. That is why citizens do not receive the full salary agreed with our bosses, partners, or clients since a part of that money goes to the public coffers.
The current objective of citizens is, therefore, to try to pay fewer taxes or, at least, reduce them in order to have greater economic solvency. It is important to note that, in no case, is it allowed not to pay said taxes since it would be a breach of a tax obligation. This can lead to an administrative or criminal sanction.
Why do we pay taxes?
- Support for public expenses. As we have already mentioned, taxes are used to help finance public expenditures made by the State to improve the environment and the lives of citizens.
- Redistribution of income. This motive is based on the economic capacity of the citizens. The rule is the following: who more money has, more taxes paid. The idea is to seek a state of equality among all individuals and to help each other.
- Greater efficiency of the economy. The greater the economic solvency the State has, the greater public services it can offer to citizens.
- Recovery from the crisis. Currently, taxes are being increased in Spain with an eye toward economic recovery. However, this measure is a double-edged sword, because many families are having trouble making ends meet and are now forced to pay higher taxes, and, as a result, their economic capacity is damaged.
All this information suggests that we have no choice but to face taxes for the benefit of all. However, there are certain actions that allow us to reduce the amounts we have to pay in taxes, all in a legal way.
Citizens not only want to pay fewer taxes for the fact of saving, it is also due to the complexity of their administration and calculation. In order to facilitate this last action, we can use mobile apps such as Fintonic, which helps to control personal finances and check income and expenses at all times.
How to save on taxes?
1. Open a retirement account
One of the main tips to pay less in taxes is to open a retirement account in a savings or investment fund. The money that we allocate to this account cannot be used until we reach a certain age but, being in this fund, the Treasury does not have access and, therefore, the taxes will be lower. This action is completely legal since said money is considered deductible.
2. Don’t be late with payments
A second formula is to pay. At first, it may seem contradictory, but it is not. Paying can help us reduce expenses. In the event that we do not fulfill our responsibilities, we will be penalized and will have to pay fines, surcharges or even evasion charges.
3. Ask for invoices for your purchases
In the case of companies, expenses on material or equipment for the office or for carrying out business activity will be deductible. In this sense, it is advisable to request invoices for everything that is purchased in order to deduct those expenses.
4. Benefit from deductions
Focusing on the personal situation of each person, those who have bought their home before 2013 and those who have a large family will be able to save on taxes.
As we are seeing, in order to pay fewer taxes we have to analyze, first, our personal and work situation and then inform ourselves of the types of deductions that exist and if we can benefit from any of them. We may be paying more taxes than we are due to a lack of information.
In some cases, it is necessary to have an exact calculation about our economy. This calculation becomes practically impossible when it is intended to be done mentally, therefore, if necessary, the idea of having a professional to help with finances should not be ruled out, since, in the long run, it can be extremely profitable.