Give yourself tax breaks

You don't have to wait for the new government to give out gifts - you can give yourself tax breaks today.

You can of course wait and hope that the new government intends to look your way in terms of tax relief in the coming years, but did you know that you can give yourself a tax relief this year? Even a rather large one? It just takes a simple trick here in November and December.

AND: You don't even have to be one of those who pay top tax to get the tax relief.

The magical journey to the tax relief is called installment pension. An installment pension is a savings for the future, and can be paid out at the earliest at the pension payment age. This technical term actually means 3 years before the state pension age (unless you were born before 1/7-1960).

Enough about the future, now for the trick. Contributions to an installment pension are deducted from your taxable income, and therefore you can achieve a tax saving of approx. 52.5%. However, there is a maximum amount that can be paid into an installment pension annually, and this year it is NOK 64,347 if you pay into an employer scheme and NOK 59,200 otherwise. The amount MUST be paid in by 2022, so if you want to enjoy the maximum tax benefit, you need to act soon.

It is important to add that when the payment is made, it will be taxed as personal income, but remember that in the meantime you have received a return on the full untaxed amount.

So from here on, the call to get started must be heard! And finally, reach out if you need help. Remember that the funds for paying into your installment pension can often be found in other of your assets, such as your home - it's about looking at your finances across the board.

PS. You must remember that during the payment, if you are a pensioner, you risk being offset against various social benefits (e.g. the pension supplement), as you may then hit the limits of how much personal income you may have.

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