Hungary’s average tax load is generally significant, with research revealing that the amount for regular individuals is 34%. That’s quite a chunk of your hard-earned money. Thankfully, there are some simple and savvy moves you can pull to cut down your taxes without breaking a sweat.
From adjusting your business expenses to leveraging tax credits, below are four ways to save more on your taxes while still playing by the rules.
Be tax-savvy and maximize your business expenses
Do you have a business, or are you hustling as a freelancer? You can manage some of your taxes by squeezing the most out of your business expenses. It’s about keeping tabs on every little detail, like office supplies, travel costs, and gear you purchase.
And here’s why: you can subtract these things or expenses from what you made, which means less taxable amount. The trick is to stay on top of your spending game, and you’ll be waving goodbye to some serious tax cash.
Take credit for having a child
If you’re a parent, you can enjoy some tax benefits, including tax credits. The more kids, the higher the credit. And if you’re shouldering childcare expenses, there’s gold at the end of that rainbow, too. For example, if you have dependent children, you can benefit from deductions related to childcare expenditures. According to PwC, you can pocket HUF 66,670 for one dependent.
If you have two kids, that’s HUF 133,330. Talk about HUF 220,000 for parents with three or more. Knowing the ins and outs of these perks is best because they can give your tax bill a serious makeover. And don’t sleep on the paperwork needed to claim these goodies when the tax time comes knocking.
Be proactive with estate planning
Hungary has its own inheritance and gift taxes that can shake things up for your heirs. That’s where smart estate planning comes into play. Consider setting up trusts, making the most of those inheritance tax exemptions, and other strategic moves to ensure your loved ones aren’t hit hard by taxes when you’re not around. A word of advice? Consulting experts in this field, like Western International Trust Company Limited, can provide top-notch guidance to help you make informed decisions.
Donate to charity
What if you can do good and save cash? Donating to registered charities isn’t just about spreading good vibes; it can lower your tax bill. Double-check your filing to see if you can get a break. You get to claim deductions for your generous acts, so ensure you’ve got all the receipts and thank-yous from those charities. It’s like being a superhero and a tax whiz all at once.
This step is a win-win situation, as you make an impact while keeping more in your wallet. The above tips provide many helpful and excellent ways to trim down your tax bill. Remember, you’re not cheating the system – you’re just making the most of the opportunities available.