IRS Guide: Tips to maximize your refund or pay less tax.

5 strategies to maximize refund or reduce tax to pay

This year, many taxpayers may receive a lower refund or even face an additional payment due to changes in the withholding tables implemented last year. If this is your case, know that you can still adopt some strategies to increase the refund or reduce the amount to pay.

"For many families, the IRS refund is an opportunity to deal with unexpected expenses, but, this year, taxpayers are facing a lower-than-usual refund or the fact that they still owe taxes to the State. However, there are details that you should take into account before submitting the declaration and that can help reduce the tax to be paid or even take better advantage of the tax benefits you are entitled to, in order to receive a larger refund," explains DECO PROTeste, cited in Notícias ao Minuto.

So, according to the news, the consumer defense organization prepared a guide with 5 tips to consider when submitting your statement: .

Insert expenses manually

If you did not validate all expenses correctly, did not enter them on time or still have some expenses to submit that do not appear on the e-invoice (such as education expenses abroad), you can still enter them manually when filling out the IRS declaration.

It is in section 6-C of annex H that you can do it. When asked if you want to declare expenses instead of e-invoice, you should answer "Yes". By doing so, you will have to replace the total expenses already calculated there with the new totals and keep the receipts for four years, in case the Tax Authority asks you to justify the manually entered values. If you want the Tax Department to take into account everything you have already validated in the e-invoice, you should answer "No".

Enter expenses for household services.

One of the new features of the IRS to be submitted this year is the possibility of deducting 5% of expenses with domestic services, up to a limit of 200 euros. Before submitting the declaration, confirm if the values are correct and if the data is already pre-filled. If these expenses do not appear in the e-invoice, enter them manually in box 6-C of annex H. As explained in the previous point, you will have to manually enter the new totals of the expenses you made in 2024. To enter expenses with domestic services, fill in fields 680 to 682, using code 666. You will have to identify the member of the household who incurred the expense, the taxpayer number (NIF) of the worker in question, and the expenses incurred.

Include the interest on fixed-term deposits and savings certificates.

Including interest from term deposits or savings certificates in your IRS return can increase your refund. However, this option only makes sense if your annual taxable income is less than 21,321 euros. You will be taxed at a lower rate than the default 28% that these interests already pay. If you earned above 21,321, it is not beneficial to include them, and it is more advantageous to opt for autonomous taxation, as the applicable rate through inclusion will exceed 28 percent.

If you do not want to take any risks, simulate both options before submitting the IRS statement, to understand which one is the best. To include interest from fixed-term deposits or savings certificates in the IRS, you must fill out annex G of the IRS statement.

Youth with income up to 8,500 euros should not submit IRS.

Taxpayers with annual incomes below 8,500 euros are exempt from submitting the IRS declaration. For younger individuals, this is also a way to not lose a year of Young IRS benefits. A taxpayer with these annual incomes does not have any Young IRS benefits, and by choosing not to submit the declaration, they suspend the counting of years under this tax regime, which can be resumed in the following years if they have incomes to declare that allow them to obtain a benefit.

For taxpayers over 35 not covered by the Youth IRS, filing an income tax return - even if not mandatory - may bring benefits. If they had withholding taxes, they may receive a refund.

Check values before accepting automatic IRS filing.

"The automatic IRS makes life easier for many taxpayers, but does not necessarily lead to the best solution. It is always possible and even advisable to simulate the manual tax return, as this may allow for a higher refund. The Tax Authority makes a proposal based on the data it has available, but there may be missing data that you can input before submitting the return. Furthermore, the automatic IRS assumes, by default, that the return is submitted separately, but it may be more advantageous to do it jointly."

Read more: IRS Delivery: How the refund can help reduce credit costs

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