IRS 2024: Changes, Deadlines & What to Check Before Filing

April marks the start of the annual IRS filing period in Portugal, and with it comes the usual wave of questions. What’s changed this year, how much can you expect to receive – or pay – and what should you confirm before submitting your return? The filing period runs from April 1st to June 30th, and submissions must be made electronically through the Portal das Finanças.

Key Changes Impacting Your 2026 Return

Updated Tax Brackets & Rates: Tax brackets have been adjusted, with reductions of 0.3 percentage points in the rates for the 2nd through 5th brackets.
Increased Minimum Existence: The minimum existence threshold has been raised to €12,880, meaning income below this level is tax-exempt.
Standard Deduction: A standard deduction of €4,597.09 is available to all taxpayers.
New Young IRS Incentive: A new incentive, “IRS Jovem,” offers partial or full tax exemption for taxpayers up to 35 years old.
Household Service Deduction: A 5% deduction is available for expenses related to household services, up to a maximum of €200.
IRS Contribution Increase: The option to allocate a portion of your IRS refund to a cause has increased to 1% of your tax liability, with no cost to the taxpayer.
New Invoice Deductions: New deductions are available for expenses like books and cultural events, but these are only valid for the 2026 tax year.

Alongside these changes are new reporting requirements, particularly concerning assets held abroad, including cryptoassets. These measures aim to increase transparency and reduce tax evasion.

Is the Automatic IRS Return Always the Best Option?

Not necessarily. While the automatic IRS return (IRS Automático) covers many taxpayers, it doesn’t always yield the most favorable outcome. Before accepting the pre-filled return, it’s crucial to verify the accuracy of the reported income, the composition of your household, any applicable deductions, and specific options like the IRS Jovem incentive or disability status. Failure to validate the information can lead to delays in refunds and prevent necessary corrections. If the return is automatically submitted on June 30th without your review, it could impact your financial outcome.

Changes to Reporting Obligations

There’s a strengthened focus on fiscal compliance, particularly regarding the declaration of assets held in countries with more favorable tax regimes. This includes cryptoassets and financial instruments held abroad. The goal is to enhance transparency and minimize underreporting of income and assets.

Preparation is Key: What to Do Before Filing

Proactive preparation is increasingly important. Before submitting your return, confirm all deductions registered in the e-Fatura system, validate your household composition, ensure access to the Portal das Finanças, request any missing passwords in advance, and retain invoices for at least four years. Avoiding the first and last days of the filing period can similarly help you avoid potential technical issues or delays.

Will Refunds Be Lower This Year?

A decrease in refunds is a likely scenario. Changes to withholding tax rates in 2025, which brought the amount of tax withheld closer to the actual tax liability, resulted in lower refunds or even additional tax payments for many taxpayers. This trend is expected to continue in 2026.

Final Checks Before Submission

A final review can significantly impact your overall tax outcome. Essential steps include verifying all expenses and deductions, confirming your household composition, validating eligibility for the IRS Jovem incentive (if applicable), simulating different tax scenarios, and gathering information about capital gains, foreign assets, or other relevant expenses.

The Portuguese tax authority, Autoridade Tributária e Aduaneira (AT), provides detailed information and support through the Portal das Finanças. Taxpayers can also seek assistance from Finanças offices or Parish Councils (Juntas de Freguesia) to help with completing their IRS returns. For further information, you can contact the AT by phone at (+351) 211 245 980, or consult the IRS Portal. Understanding these changes and taking the time to prepare thoroughly will help ensure an accurate and efficient tax filing process.