The annual tax return for individuals in Mexico is a procedure that taxpayers must complete before the tax administration service (SAT) no later than April 30.
Individuals who have the obligation to file the annual tax return with the SAT are those who obtained income from the following:
- Annual income over 400,000 pesos.
- If they worked for two or more employers.
- If you obtained indemnity income
- If you obtained income from professional services or entrepreneurial activities
- If you obtained income from real estate leases
- If you obtained income from interest or dividends
- If you obtained income from the sale and/or acquisition of assets
Remember that in the annual tax return you have the right to reduce personal deductions, as long as you have the invoice and have made the payment by electronic transfer, credit card, debit card or nominative check, the limit for personal deductions is 15% of your annual income or 5 times the annual UMA.
Personal Deductions:
- Medical expenses. This may include medical fees, dentist, psychology, nutrition, nursing, treatments, disability or incapacity expenses, hospital expenses, medicines included in hospitalization bills (not pharmacy receipts), clinical analysis, laboratory studies or prosthesis, purchase or rental of devices for reestablishment or rehabilitation, prescription optical lenses (up to 2,500 pesos).
- Funeral expenses. Funeral expenses are deductible if they do not exceed the annual UMA (Unidad de Medida y Actualizacion y Actualizacion) of the year to be declared. The service can be for the taxpayer, his/her spouse or common-law spouse, as well as for parents, grandparents, children and grandchildren.
- Donations. Includes non-monetary and non-remunerative donations granted to authorized institutions and to the Federation. The limit is up to 7% of the accumulated income of the immediately preceding fiscal year for those granted to authorized grantees and up to 4% for those granted to the Federation.
- Tuition. The amount paid for each of the children must not exceed the following annual limits: preschool, 14,200 pesos; elementary school, 12,900 pesos; junior high school, 19,900 pesos; technical professional, 17,100 pesos; high school or its equivalent, 24,500 pesos.
- School transportation expenses. Applies when this is mandatory or when such expense is included in tuition.
- Supplemental retirement contributions. Includes supplementary or voluntary contributions made directly to the subaccount.
- Special and personal savings accounts. These are deposits based on a personal plan related to age, retirement or withdrawal, the amount of which does not exceed 152 thousand pesos in the year.
- Medical insurance premiums. Payments of premiums for complementary or independent medical expense insurance of public health services, whose beneficiaries are both the taxpayer and his/her spouse, common-law spouse, ascendants or descendants in a straight line, are deductible.
- Mortgage loans. Actual interest accrued and effectively paid on loans with the financial system, INFONAVIT or FOVISSSTE, among others, are deductible.
The SAT emphasized that the total amount of personal deductions (except for medical expenses due to disability and incapacity, voluntary contributions and complementary retirement contributions, deposits in special savings accounts and tuition) cannot exceed five annual UMA (Unidades de Medida y Actualización) of the fiscal year to be declared or 15% of your total income, including exemptions, whichever is lower.
Remember that it is important to have the following information at hand:
- RFC and Password and/or Efirma in force.
- Electronic invoices of your income, payroll receipts, expenses and personal deductions.
- Bank statements.
- Proof of income tax withholdings, if applicable.
Since the tax return is a mandatory procedure, the SAT may fine taxpayers who do not file the annual tax return in due time and form, the fines may range from 1,810 to 44,790 pesos in accordance with Article 82 of the Federal Tax Code.
