Tax deductions: how to get cashback from the state?

The beginning of the year is the best time to tackle the issue of reimbursing some types of expenses incurred the year before, and thereby replenish the family budget. How can I do that? Mail.ru Finance asked Mary Valishvili, Master of Law, Associate Professor of the Department of State and Municipal Finance of the Russian Economic University, about this. G. V. Plekhanov.

Let's figure out what deductions there are, who is entitled to them and how to apply for a refund.

Now in Russia you can get several types of “cashback” from the state:

- standard,

- social,

- property,

- investment,

- professional.

The standard deduction is available to preferential categories of citizens and citizens with minor children, which is issued by the employer and thereby reduces the amount of tax paid on a monthly basis.

The professional deduction applies to citizens engaged in private practice, for example, individual entrepreneurs.

Investment deductions also have their own target audience - investors with individual investment accounts.

Let's take a closer look at the two most common and popular types of deductions - social and property.

Money into society

Social tax deductions can be obtained for expenses of social significance: education, treatment, charity, sports, voluntary insurance (life and pension insurance), formation of the funded part of a labor pension.

You can receive cashback for the period up to 2023 inclusive for expenses incurred in relation to yourself, your children, as well as brothers and sisters. You can also compensate for the costs of treatment of spouses and parents. Spouses' educational expenses can be reimbursed starting in 2024.

At the same time, the law establishes a maximum amount of expenses: until 2023 inclusive, it is 120,000 rubles for expenses incurred in relation to oneself, and up to 50,000 rubles for expenses for the education of children, brothers and sisters. Consequently, the taxpayer will be able to return 13% of 120,000 rubles, i.e. 15,600 rubles, but not more than 13% of the actual costs incurred, as well as 16% of 50,000 rubles, i.e. 6,500 rubles. For example, if a citizen spent 150,000 rubles on a child’s education in 2023, the maximum base for calculating the deduction will be only 50,000 rubles.

It is important to remember that the calculation takes into account the maximum total amount of expenses for all types classified as social, and not for each individually. The exception is expenses for expensive medical services, the list of which is approved by Decree of the Government of the Russian Federation No. 458 of  04/08/2020. For these expenses, it is possible to receive a deduction for the full cost of medical services.

From 2024, the maximum amount of expenses has increased: the total amount of expenses for treatment and medications, voluntary health insurance, sports and personal education will be 150,000 rubles, and for the education of children - 110,000 rubles for each child.

Social tax deductions can be received annually.

My home

The second common type of tax deduction is a property deduction for expenses associated with real estate transactions, for example, the sale or purchase of real estate, construction of a house and purchase of land, as well as the cost of renovating an apartment in a new building and interest on a mortgage loan agreement.

The property deduction when purchasing real estate can only be used once. The maximum amount is 2 million rubles, i.e. if you purchased an apartment for 8 million rubles, only 2 million will be deducted and the amount of “cashback” will be 260,000 rubles (13% of 2 million), and if the property was cheaper, for example, 1.5 million rubles, then it will be possible to compensate not only the full cost, but also leave the opportunity to receive in the future (if there are relevant expenses) up to 500,000 rubles.

If the property was purchased with a mortgage, you can also apply for a deduction for interest: the maximum amount is 3 million rubles (the deduction will be up to 390,000 rubles). However, unlike the previous situation, the interest deduction cannot be transferred to another object or used later.

If a citizen has sold his real estate and the law provides for the obligation to pay personal income tax (for example, if the apartment has been owned for less than 5 years), it is possible to apply a tax deduction in the amount of 1 million rubles (i.e., the cost of the property will be reduced by 1 million. rubles when calculating personal income tax).

Who can apply for a tax deduction? To receive a refund of previously paid personal income tax, several conditions must be met. Firstly, an individual must have Russian citizenship. Foreigners who have a temporary residence permit or residence permit cannot take advantage of tax deductions. Secondly, the citizen must have taxable income during the period when the expenses subject to accounting for obtaining a deduction were incurred. The calculation takes into account income taxed at rates of 13 or 15%, for example, wages, income from the sale of property (except for securities), insurance payments, etc. To carry out the calculation, the annual amount of income and the income paid from it is taken, which confirmed by a tax return.

How to apply for a tax deduction? To receive cashback, a citizen must receive all the necessary documents, for example, an agreement and a check for training expenses, a license of an educational organization, an agreement and a check for payment for a voluntary life insurance agreement, etc. You can generate a 3-NDFL declaration and attach all documents in the taxpayer’s personal account on the website of the Federal Tax Service . You can log into your personal account through your State Services portal account. The documents will be sent to the inspectorate for verification, after which you will be notified of the decision made. If all documents are completed correctly and the decision is positive, you will need to enter the bank account details to which the deduction amount will be transferred.