RENDIMIENTOS DEL TRABAJO – IRPF(5)

***Video Update: 2024 Amounts: I've been studying the new limits set by the Tax Agency and trying to apply the figure to your net income. This is what the law states regarding the new limits for 2024: "This reduction will apply only to taxpayers with net earned income of less than €19,747.50, provided they do not have income, excluding exempt income, other than employment income exceeding €6,500. The reduction will be: 1) Taxpayers with net earned income equal to or less than €14,852: €7,302 per year. 2) Taxpayers with net earned income greater than €14,852, but equal to or less than €17,673.52: €7,302 less the result of multiplying the difference between the earned income and €14,852 per year by 1.75. 3) Taxpayers with net earned income between €17,673.52 and €19,747.50: €2,364.34 less the result of multiplying by 1.14 the difference between the earned income and €17,673.52 per year." But he adds something very important: "For these purposes, the net earned income will be the result of reducing the gross income by the expenses provided for in letters a), b), c), d), and e) of Article 19.2 of the Tax Law." This means that all deductible expenses are taken into account except for the €2,000 deduction generally applied to all taxpayers who receive earned income. In other words, in order to apply this reduction, the net income to be used must not take into account the €2,000 deduction applied. Therefore, for the purposes of the calculations, if the net income were, for example, €17,560.50, €19,560.50 would be applied. In that example, we would be in the third point: "Taxpayers with net employment income between €17,673.52 and €19,747.5: €2,364.34 less the result of multiplying the difference between the employment income and €17,673.52 per year by 1.14." And the specific calculation would be: €2,364.34/year – (1.14 * (19,560.50 – 17,673.52)) = €213.18/year ***Correct solution for example 2: In example 2, there is an error in the calculation of the reduction, since according to the Personal Income Tax Law, for the purpose of calculating the reduction, the net income from work will be the result of reducing the gross income by the expenses provided for in letters a), b), c), d), and e) of Article 19.2 of the Income Tax Law. This means that all deductible expenses are taken into account except for the €2,000 deduction that generally applies to all taxpayers who receive income from work. Therefore, the correct solution for Example 2 would be as follows: Calculation of the general reduction: €7,302/year – (1.75 * (15,800 - 14,852)) = €5,643/year Reduced net income schedule: Total income: €17,000.00 Special reductions: - €450.00 Deductible expenses: - €2,750.00 Net income: = €13,800.00 General reductions: - €5,643.00 = Reduced net income: = €8,157.00 This is the link to the regulations: https://sede.agenciatributaria.gob.es...