Unlocking Tax Refunds: How to Claim Your Share Back from the Government

Have you paid taxes recently? It's time to get some of that money back from the government! This article provides a detailed guide on how to claim tax refunds and what expenses qualify. Remember, you have until April 30 to submit your claims.

Many taxpayers, including myself, pay income taxes regularly. However, there are ways to reduce the taxable amount through tax deductions. What are tax deductions? Essentially, when you apply for a deduction, the government lowers the taxable income amount, allowing you to recover a portion of the income tax previously paid. This refund typically covers purchases like real estate, education, or medical treatment.

Who is Eligible for Tax Deductions?

Only individuals who are tax residents and pay income tax at a rate of 13% qualify. Entrepreneurs operating under special tax regimes without income subject to this rate are ineligible.

Types of Tax Deductions

The tax code outlines several deduction categories:

1. Standard deductions.
2. Social deductions.
3. Property-related deductions.
4. Professional deductions.
5. Loss carryover deductions from securities transactions on organized markets.
6. Loss carryover deductions related to participation in investment partnerships.

The most significant deduction is the property deduction, so we'll start there.

Property deductions apply when purchasing any real estate. Here's how it works: when you buy a property, the government refunds 13% of the purchase price because you've already paid income tax on that amount. For example, if you paid $2,700 in income tax during the year, you could receive a refund of up to that amount against the property purchase. If your deduction exceeds this, the remainder can be claimed in subsequent years.

The maximum property deduction is $27,000 per person for the property itself and up to $40,500 for mortgage interest. This means you can claim refunds on multiple properties (applicable only for purchases made since 2014). Mortgage interest deductions apply to only one property. This deduction also extends to renovation expenses.

You can also receive deductions for other purchases, but the total amount for these cannot exceed $1,620 annually. Note this is the amount from which 13% is deducted, not the refund itself. Education and costly medical treatments are exceptions and not included in this limit. All deductions apply only to expenses from the past tax year.

1. Standard Deductions (per tax regulations, with maximum refundable amounts):

• $7 per month for citizens with state honors or special statuses (e.g., national heroes).
• $19 per month per child if parental income does not exceed $3,800.
• $41 per month for the third and subsequent children.
• $41 per month for minors with disabilities or disabled children under 24 years old who are full-time students or interns.
• $41 per month for individuals affected by radiation sickness, veterans, and other privileged groups.

2. Social Deductions cover expenses in these areas:

• Charitable donations up to 25% of annual income.
• Education expenses for oneself or dependents under 24 years old; up to $810 annually for children’s education and up to $1,944 for personal education combined with other social expenses, excluding high-cost medical care.
• Medical expenses and medication costs for the taxpayer and close family members, including high-cost treatments fully refundable.
• Additional contributions to funded pension schemes paid by the taxpayer (not employer-paid contributions).
• Contributions to private pension plans, with a maximum deductible amount of $1,944 annually.

Required Documentation

To claim education deductions, submit a tax return along with:

• Income statement.
• Tax refund application with bank details.
• Enrollment contract.
• Educational institution’s license.
• All payment receipts.

For medical deductions, include with your tax return:

• Refund application.
• Income statement.
• Proof of medical payments and service contracts.
• Medical organization’s license.
• For medication refunds: official prescription and payment receipt.

Voluntary health insurance deductions require:

• Insurance policy or contract.
• Insurance company’s license.
• Payment documents.

For property deductions, submit with your tax return:

• Income statement.
• Tax refund application.
• Property purchase agreement or construction participation contract.
• Property acceptance certificate.
• Ownership certificate.
• Payment receipts.

Mortgage-related deductions also require:

• Loan agreement.
• Proof of interest payments.

Once all documents are submitted, the tax authority reviews them and decides on granting the deduction.

Timelines for Submission and Refund

Tax returns must be filed by April 30 of the year following the tax period for which the refund is claimed. Social, property, and standard deductions can be claimed for up to three previous tax years.

The tax authority has up to three months to review your return, after which refunds are processed within one month.

Alternatively, you can submit an application and notification to your employer, which will then adjust the tax withheld during the year to reflect your deduction. This method accelerates your refund but requires visiting the tax office twice — once to obtain the notification and again to receive it.

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