If you are a freelance worker, the time to make your annual tax declaration before the Tax Administration System (SAT) is approaching. If you don’t remember, you have until April 30, 2022 to do it and here we tell you how and also what you can deduct from your taxes.

Remember that if you registered under the Simplified Trust Regime (Resico), you cannot make deductions. This is because this benefit was replaced by a lower percentage in the Income Tax rate (ISR) —which is between 1% and 2.5%.

If you are paying taxes under the Regime for Individuals with Business or Professional Activity (RPFAE) or as an employee, you can deduct some things.

Why do we make an annual declaration?

The annual declaration is the only way to report to the SAT the income and expenses you generated during the year, in order to contribute to the payment of taxes.

The document reports the “Income Taxes” that taxpayers must submit and/or send to the tax authority.

For natural persons such as freelance workers registered with the RPFAE or salaried workers, it is established that the ISR percentage is based on what they earn monthly.

How do I make my annual statement?

To make your annual declaration, you need to have the following documents to verify the information:

  • Records of perceptions and withholdings.

  • Current monthly statements. If you omit to present one or more, you can make the provisional payments before making the declaration.

  • Log of information necessary to prepare the monthly declarations; You can download it from the SAT page.

  • Receipts for fees or invoices for related expenses.

  • Fee receipts or invoices for personal deductions, if you wish to include them.

To make your declaration, you need to have your RFC and your e.signature. With this in hand you can follow these steps:

  1. Go to the SAT page.

  2. Access your account with your RFC and password or e.signature.

  3. Click on the tab that says “statements” and select “annual”

  4. Carefully fill in the information requested.

  5. Check that the data is correct.

  6. Click send.

  7. The system will notify you with a confirmation message.

  8. Sign your return with your e.signature

  9. Send her.

  10. Check that the system has returned your acknowledgment of receipt.

  11. Your process will end here if your return results in zeros or with a credit balance.

If the statement indicates that you must make a payment, you can do so by bank transfer. Then the bank will issue you a receipt that you must keep.

Take into account that the SAT offers two options to capture your return: with proposal, which is when the system gives you all your information that it has registered; or with manual capture, which is when you must fill out everything manually, including withholdings and electronic invoices that you want to deduct.

If you choose the first option, check the data very well before sending the information. If you do not agree, click on “I do not accept proposal” and add or delete the personal deductions that are needed.

“When you fall behind in paying your taxes, you must pay updates and surcharges. The rate used by the SAT is 1.47% per month and the updates are calculated based on the National Index of Prices and Quotations (INPC)”, explains Andrés Hinojosa, founder and CEO of Simmple.

What can I deduct on my tax return as a freelancer?

Deductions are expenses that as a taxpayer you have the right to reduce from your accruable income in the Annual Declaration for the year, according to the SAT.

There are mainly two types of authorized deductions: personal and general, says Hinojosa.

«The personal ones are those that can be deducted by any natural person (except RESICO and RIF) and only during the annual declaration. The general deductions are based on the economic activity that you carry out and are used together with your monthly or bimonthly declarations according to your tax regime, “he added.

If you are under the regime of a natural person with business activity, you can deduct all the expenses related to your economic activity as long as you invoice them, says the expert.

For example, if you provide design services, you can deduct an iPad and everything related to your profession, but you will not be able to deduct the purchase of a toy.

Regarding authorized personal deductions, the expert points out that they may not exceed the amount equivalent to five Units of Measurement and Updating or UMAS (175,505 pesos) or 15% of their income, whichever is less.

Remember that you can only deduct what you pay by card, check, or transfer.

These are the authorized personal deductions, according to Hinojosa:

  • Medical, dental, hospital, funeral and mental health expenses.

  • Optical lenses (up to 2,500 pesos and these can be paid in cash).

  • Medical expense insurance premiums.

  • Interest paid on mortgage loans.

  • Voluntary contributions to the retirement fund.

  • Tuition from preschool to high school.

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