Tax Deductions: Nature and Application Problems

Abstract

Providing tax deductions admits the population to feel the actual financial participation of the state in their lives. The paper defines the concept of tax deduction, revealing it from the point of view of legal optimization of the taxation of individuals. The research singled out conditions for granting standard, social, investment, property, professional tax deductions and it considered viable options for a taxpayer’s application to the tax authorities for the right to use them. The purpose of the study is to substantiate and develop practical recommendations for increasing the amount of tax deductions, considering dynamic changes in the minimum wage. The authors defined the following tasks to achieve it: study and generalize the views of Russian scientists on the problems of providing tax deductions in modern economic conditions; identify and argue the socio-economic problems of tax deductions and suggest ways to solve them; develop approaches to improve the mechanism for increasing the size of tax deductions in order to fulfill the functions assigned to them, namely, the impact on improving welfare and providing tangible state social guarantees to the population. In the work’s course, the authors used abstract-logical, computational-analytical, monographic and experimental methods. Also, the methodological and theoretical basis were the work of domestic scientists on research, regulatory legal and legislative acts of the Russian Federation regulating the functioning of the tax system; official publications, as well as materials of scientific and practical conferences. The results obtained will make it possible to determine the ways of more detailed improvement of the mechanism for granting tax deductions, working out the procedure for their administration and the conditions for their provision to the population of the country. The aim of this is to establish more reasonable amounts of these deductions and implement the principle of uniform taxation of citizens of the Russian Federation.

Keywords

• personal income tax
• tax deduction
• standard, social, property, investment, professional tax deductions