There is only one month left for the end of the TAX campaign, and many self-employed workers still have to file their tax returns. Every year, they should know that they have different deductions and reductions available, depending on the expenses and investments in their business, but also on their personal and family situation.
The Tax Agency establishes different amounts each year for self-employed individuals and other taxpayers to reduce their taxable base based on their personal or family situation. One of the most important – and also unknown – reductions is the reduction for ascendants. That is, for living with a parent over 65 in the same household.
According to the Tax Agency, this measure seeks to provide significant economic relief for those self-employed individuals and taxpayers who take care of their elders, a reality that is common in an aging society like Spain.
How much can self-employed individuals reduce their taxable base for having dependent ascendants?
As is well known, the personal and family minimums are reductions that all self-employed individuals and taxpayers can choose in their Personal Income Tax (IRPF), depending on their age, family circumstances, whether they have dependent children, or even if they live with ascendants over 65.
These amounts are subtracted from the taxable base, which is the difference between the expenses and profits obtained during the previous year. The tax rate will then be applied to this base. Therefore, by reducing the base, taxes to be paid are also reduced.
In this way, taxpayers may be entitled to a personal minimum of 5,550 euros, which increases by 1,150 euros if they live with individuals over 65 and by an additional 1,400 euros if the person they live with is over 75.
In addition, these reductions will also depend on the autonomous community in which the self-employed worker lives. Each autonomous community establishes different additional reductions in the autonomous section each year, which usually range between 1,000 and 1,500 euros.
Requirements to Apply the Reduction for ascendant over 65 years old
To benefit from this reduction, self-employed individuals as well as their ascendants must meet several specific requirements:
– Age of the Family Member: The family member must have reached 65 years of age on the tax accrual date – usually December 31. Otherwise, it is necessary for them to have a disability equal to or greater than 33, regardless of age.
– Coexistence: The family member must live with the taxpayer for at least half of the tax period, that is, 183 days a year. Ascendants with disabilities who are interned in specialized centers and economically dependent on the self-employed individual are considered to live with the taxpayer.
– Family Member’s Income: The annual income of the family member must not exceed 8,000 euros, excluding tax-exempt income such as certain disability pensions. This condition ensures that the deduction benefits those who truly need economic support.
– Income Tax Return: The family member over 65 years of age must not file an income tax return with incomes exceeding 1,800 euros.
The amount also increases if the self-employed individual or the ascendant have a disability
In addition to the aforementioned reductions, tax benefits for ascendants can be expanded as long as the self-employed individual or the ascendant they live with have some degree of disability. The Tax Agency outlines in the following table the percentages and scenarios in which the reduction for ascendants can be increased.