Prepaying the mortgage interest can also result in a deductible item. Under tax law, interest may be prepaid and deducted for six months. Check with your bank whether this is possible, because not all banks offer this option. Especially for people who are in the highest tax bracket, prepaying interest is beneficial. An additional advantage is that prepaying mortgage interest lowers your assets – and therefore also your wealth tax. Using the fkc-concept is essential now.
Give to charities
At first sight, giving to charities seems to be mainly a cost item. Still, it is not a bad move financially. Gifts to institutions that have been officially designated as public benefit organizations (the so-called ANBIs) are deductible as soon as the amount exceeds 1 percent of the taxable income. The part of the gift that exceeds 10 percent of the income is no longer deductible. There are no restrictions or maximum amounts for regular donations (giving five years or more consecutively to the same cause). Donating money to a good cause is not only an extra deduction, but also a way to temporarily reduce your assets.
Build up extra pension
Do you want to put some extra money aside for your old age before December 31? To do! Pension provisions such as annuity insurance or bank savings products are often tax deductible.
Increase the deductible
Do you have no health problems, do you rarely see a GP practice or hospital inside and are you blessed with a considerable financial buffer? Then it may be a good idea to voluntarily increase the deductible of your health insurance policy. In that case you will receive a discount of a few tens per month from many insurers. On an annual basis, the amount saved can therefore amount to several hundred euros.
Pay the health insurance before December 31
Do you have a fair amount of money in your pocket? Then consider paying the health insurance premium for the coming year all at once and before 31 December. With many insurers, this provides a modest but nice discount. In this overview you can see which discount percentages the various health insurers use.
Pay off an extra piece of mortgage
Because the interest rate on savings is currently at an all-time low, additional repayments on the mortgage are currently often more profitable than saving. So check carefully what percentage you can repay each year without penalty. Usually this is an amount between 10 and 20 percent of the original loan amount. By making extra repayments, you simultaneously reduce the taxable capacity.
Temporarily get some cash from the bank
Are you around or just above the tax-free capital limit of 25,000 euros? Then quickly get some cash from your bank account at the end of December. Box 3 provides for an exemption for cash and vouchers up to an amount of 520 euros per person (underage children count). Did you get the money just before or on New Year’s Eve? In that case, the withdrawn money is no longer part of your taxable capital. By the way, you do not necessarily have to spend it, but you can also simply transfer the amount withdrawn to the savings or checking account next year.