It is important to take into consideration the following elements for your annual 2016 declaration, so you can be informed of which is the income you need to accrue, the expenses that are considered deductible and know the guidelines that the Income Tax Law states regarding this subject.1. If your income source is only your salary, you are required to submit your annual return if you fall in any of these cases:
You earned more than $400,000 pesos
Your income was earned through two or more employers
You had other accrued income other than salaries. For example, house rental income, fees, dividends, etc.
If you stopped working before December 31st, 2016.
2. You are required to submit your annual return if you receive income from interest and salaries and the sum of both is up to $400,000 pesos, as long as the amount of the real interests are more than $100,000 pesos.
3. In the event that you have the following income, they must be informed in your annual return:
• Income by loans, prizes and donations as long as they, in the individual or in group, add up to more than $600,000 pesos.
• Income by house alienation. It should be noted that the alienation of the house is exempt, provided that the amount does not exceed 700,000 UDIS (3.8 million pesos approximately) and there has not been a house alienation in the three previous years.
• Travel expenses that exceed $500,000 pesos, as long as the total sum represents more than the 10% of the wages and salaries paid by the employer.
• Income by legacies and heirlooms.
• Exempt income by concept of legacies or heirlooms and house alienation, must be informed when the sum of the total income reported in your return, exceeds $500,000 pesos.
In the event of failure to report the above mentioned income, the tax authority could consider them as accrued income.4. If you produce a favorable balance of more than $10,000 pesos, you will have to file the annual return with your e-signature (formerly known as FIEL electronic signature.)
5. All payments of authorized deductions must be carried out by nominative check, electronic fund transfer, debit, services o credit card. It is of utmost importance that you do not make any of these payments in cash, except of the expenses made for donations.
6. You can deduct the expenses listed in the numerals below, that you have made for yourself, your spouse, parents, children and grandchildren as long as said persons havenot received during the year income equal or superior to that of a yearly minimum wage salary of their geographical area ($26,659 pesos.)
7. Regarding expenses related to health, you can deduct the following:
• Medical, dental or nurse fees
• Purchase of prescription glasses up to $2,500 pesos.
• Hospital expenses
• Purchase or rental of physical therapy equipment
• Medication sold by hospitals
• Lab analysis
• Clinical studies
• Medical expense insurance premiums
8. As for expenses related to education, you can deduct the school fees paid to private schools. We recommend to review the following requirements:
• That the school has authorization or recognition of official validity in terms of the General Education Law.
• That the CFDI receipt contains the full name, CURP, and education level of the student.
• That the amount and concept of services rendered exclusively for the education of the student are properly separated.
It is important to mention that expenses made for enrolment, maintenance fees, education materials, additional courses or subjects, uniforms and / or exams of any kind are not to be considered as education services.
The amounts allowed to be deductible are as follows:
* Bachelor, diplomate, master's degrees and doctorates are not deductible.
||Yearly deductible limit
|Preparatory school or its equivalent
9. As for other expenses that can be deductible, we find the following:
• Funeral expenses. It should be noted that in case that the expenditures are anticipated to cover future funeral needs, they will become deductible on the year that they are used.
• Real interest earned and effectively paid due to your house’s mortgages, as long as the credit granted does not exceed seven hundred and fifty thousand UDIS (4 million pesos approximately). Please note that you can only deduce the real interest corresponding to a single mortgage.
• Non onerous nor remunerative donations when given to authorized institutions. You must consult the authorized donee directory and consider that the donations may not be greater than 7% of the accrued income obtained in FY2015.
• Expenditures made to the complementary retirement subaccount, or personal retirement plans, as well as the ones made in the subaccount of voluntary contributions, as long as they comply with the permanence requirements for the retirement plans. It is important to note that the contributed amount that will be considered deductible cannot be greater than 10% of the accrued income obtained in FY2016 and cannot exceed $133,298 pesos.
10.There is a general limitation applicable to the total amount of personal deductions, which consists on being able to deduct only the amount that is lesser than $133,298 pesos or 15% of the income total, including those that are exempt.
The general limitation is not applicable to the expenditures of tuition, donations and voluntary contributions to the retirement account, because they have their own limitations which were pointed out in the numerals above.If you have any doubts or questions, please do not hesitate to contact us.