Tax Recovery Options for Individuals Earning Under €50,000

How Much Can You Recover in Taxes If You Earn Less Than €50,000?

With the new deductions introduced by the 2025 Budget Law, it’s crucial to explore how this overhaul impacts tax recoveries.
The changes introduce a cap on allowances based on income, a family quotient, and detailed calculations on deductible expenses that may not be entirely applicable anymore.

The confusion surrounding these adjustments is indeed significant for those accustomed to claiming deductions each year.
Understanding the new mechanisms is vital to ensure that taxpayers don’t miss out on potential tax breaks.

What Will Change in Deductions Starting in 2025?

As of now, official clarification on how deductions will evolve remains pending.
However, we can analyze preliminary information about deductions related to expenses incurred.

The government aims to rationalize expenses through modifications to the overall entitlement for tax deductions.
This includes all deductible expenses, such as those from mortgages or healthcare costs.

The strategy intended to save while not increasing taxes results in reduced tax benefits.
Notably, the new rules imply a maximum deduction cap based on income: 8% for incomes up to €50,000, 6% for earnings between €50,000 and €100,000, and 4% for those exceeding €100,000.

It’s also crucial to note that the existing reduction in deductions for incomes between €120,000 and €240,000 remains.
At this range, the deductions cease altogether.

The Impact of Changes on Deductions

Previously, there was no limit on deductions a taxpayer could claim (within their tax capacity).
The recognized cap will now encompass all allowable expenses, including those from various renovation bonuses.

One reassuring aspect is that this new framework will apply only to expenses incurred from January 1, 2025, moving forward, leaving pre-2025 expenses unaffected.
Therefore, individuals benefiting from deductions on property renovations or mortgage interest payments made before 2025 can still utilize the full benefits without breaching the maximum deduction cap.

Although individuals and professionals will bear the burden of calculating expenses pre and post-2025, this adjustment serves as a safeguard for taxpayers.

How Much Can You Recover If You Earn Up to €50,000?

For an income level of €50,000, eligible deductions max out at €4,000.
It’s vital to remember that these limits apply to single taxpayers; those with families can benefit from the family quotient.
For instance, for a family with three or more children, the threshold may rise to €8,000 even with incomes up to €50,000.

Income Level	Max Deductible Expenses (Single)	Max Deductible Expenses (Family with 3+ Children)
€10,000	€800	€1,600
€15,000	€1,200	€2,400
€20,000	€1,600	€3,200
€25,000	€2,000	€4,000
€30,000	€2,400	€4,800
€35,000	€2,800	€5,600
€40,000	€3,200	€6,400
€45,000	€3,600	€7,200
€50,000	€4,000	€8,000