Possible tax deductions

You have to pay your taxes. However, there are ways of reducing the tax burden. Not all expenses are deductible, but they can fall into various categories listed by law. What is a deductible expense? Want to know how to save taxes?

Different types of deductible expenses

Today’s government offers many ways to help you save money on your taxes. Did you know that there are various expenses we can deduct from our income tax? Here is an exhaustive list of deductible expenses:

• Donations
• Financial support
• Alimony and child support
• Certain real estate investments
• Retirement savings contributions
• Certain property charges (historic properties)
• Costs of improving, repairing or maintaining your home(s)
• Insurance premiums
• The deductible portion of the generalized social contribution on income from assets and investments
• Benefits in kind approved for people over 75

For your information, the list of deductible expenses is set out in the General Tax Code, but only if you live in France. The first condition for benefiting from this reduction in certain expenses is to live in France, or at least to receive most of your taxable income there. Don’t forget that deductible expenses are those that can be deducted from overall taxable income, and that these deductions are made before the tax is calculated.

Deductible bank fees and charges

Tax-deductible bank charges are very limited. Intervention commissions, agios, account maintenance fees and bank penalties for non-payment, among others, are not deductible.

When you fill in your tax return, you’ll find a box at the bottom for reductions in bank charges. These are usually specific and only apply to people with securities accounts or PEAs. These include custodial fees, safe deposit box rental fees and the reimbursement of insurance premium coupons. Smaller deductions are made for verification purposes by drawers and certain other types of insurance premium payments.

It’s important to pay particular attention to income from movable capital, which includes various financial investments such as life insurance and home savings plans. Not only do they have to be mentioned in the documents you fill in with your bank, they also have to be included in your tax return to reduce your tax burden.

Investing in real estate to save taxes

There are many ways to reduce your income tax through real estate investment, but it’s important to consider which option is best for you. One such solution is the use of an SCPI. However, for this solution to work better than others, it needs to be adapted to your assets, tax level and objectives. Other options include the Malraux law, bare-ownership land deficit investment or the Cosse and Denormandie law or the Pinel law among others; just choose the one that suits you!

Previously, the Duflot law reduced taxes on housing. Today, it’s the Pinel law that brings changes, offering the possibility of paying less tax on new homes under certain conditions: based above all on income and family composition according to zones (A-, A bis B1/B2). What’s more, your rental must be the owner’s principal residence.

With LMPN status, or loueur en meublé non professionnel, you can also benefit from tax reductions depending on the details of the property tax laws.

Also read: Should I invest in gold?