How do I know if I need to file an income tax return?

Have you ever wondered if you need to file an income tax return? This can be a common question for many Brazilians, especially when we're not familiar with the rules and criteria that make it mandatory. Relax, you're not alone! Let's understand together in a clear and simple way how to know whether or not you have to make this declaration.

Understanding Income Tax

First of all, let's take a step back and think: what is Income Tax anyway? Income tax is a tax levied by the government on your income throughout the year. This includes salaries, rents, investment earnings and even lottery winnings. In other words, everything you've earned may be subject to a portion to be collected by the government.

But calm down, it's not that simple and not everyone has to declare. There are well-defined criteria for knowing who is on the list of those obliged to declare and who doesn't need to worry. Want to find out if you're on it? Let's get going!

Who needs to file an income tax return?

Here begins the part that may seem complicated, but which we'll uncomplicate together. First of all, there are certain criteria that determine whether a declaration is mandatory. Ask yourself:

• Did you have an annual income of more than R$ 28,559.70 in 2023? This is one of the main points. If your total earnings (such as salary, pension or other taxable income) exceeded this amount last year, then yes, you need to declare.
• Did you have exempt, non-taxable or exclusively taxed income above R$ 40,000.00? If you received amounts such as FGTS, compensation for an accident at work or even some types of financial investments that amounted to more than 40,000 reais, you must also declare them.
• Did you make a capital gain on the sale of goods or rights? If, for example, you sold a property and made a profit, you need to report this.
• Have you traded on the stock exchange? Even if you've bought and sold a few shares, if you've made a profit or even a loss, it's time to declare it.
• Do you have any assets or properties with a total value of more than R$ 300,000.00? If you own an apartment, a house or even land that together exceeds this value, the IRS wants to know.

If you answered "yes" to any of these questions, the answer is clear: you need to file your income tax return.

What if I don't fit any of these criteria?

Now, what if you don't fit any of the above points? Then you probably don't need to declare. However, pay attention: even if you don't have to, it can still be interesting to declare.

Did you know, for example, that declaring your income tax helps when applying for a mortgage? Financial institutions generally consider your declaration as proof of income. What's more, if tax has been withheld during the year, you may receive a refund. In other words, you may end up getting back some of the tax you overpaid.

How should you declare?

Have you identified yourself in one of the situations in which you are obliged to declare and now you want to know how to do it? All right, there's no need to be alarmed. Declaring your income tax today is much easier than it used to be.

The IRS offers a program that can be downloaded onto your computer or even an app that allows you to file your tax return directly from your cell phone. You'll need to gather documents such as proof of income, receipts for medical and educational expenses and other information that could have an impact on your calculation. The more detailed and organized you are, the smoother the process will be.

An important tip: keep your receipts in one place throughout the year. That way, when it comes time to file your tax return, you won't have to chase through paperwork and you'll avoid headaches.

What happens if I don't declare?

Are you still in doubt and thinking about letting it go? Well, you should know that not declaring your income tax when you have to can have some very unpleasant consequences. We're talking about fines of up to 20% of the tax due, as well as having your CPF pending with the IRS. This can prevent you from opening bank accounts, applying for loans, issuing a passport and even taking up public office.

And nobody wants that kind of headache, do they? That's why it's very important to get organized and make sure your situation is up to date with the IRS.

Tips to make your life easier with Income Tax

Now that you know whether or not you need to declare, and have understood how it's done, how about some tips to make everything go more smoothly?

1. Plan throughout the yearKeep all your receipts, medical expenses and other deductions well organized. An envelope or a digital folder can help a lot.
2. Use technology to your advantageThere are apps and systems that can help you keep track of your finances and categorize your income and expenses, making it much easier to file your tax return.
3. Don't leave it to the last minuteThe deadline for filing tax returns is usually in April, but don't wait until the last day. Technical problems and overloading of the tax office's systems are common at this time.
4. Consult an accountant if you need toIf you have many sources of income, assets or don't feel confident about filing the tax return yourself, hiring an accountant can be an excellent investment to avoid future problems.

So, do you need to declare?

We've come to the end of this conversation, and I hope I've been able to help you better understand whether or not you need to file your income tax return. The most important thing is not to leave this responsibility behind, because even if it seems like a lot of work, being up to date with your tax obligations is something that gives you security and avoids future complications.

After all, you want to sleep soundly, don't you? If you still have doubts or need help, don't hesitate to seek information or even professional help. Filing your income tax return doesn't have to be a headache, as long as you have the right information and a bit of organization.

How are you preparing for this year's Income Tax? Let us know in the comments! Maybe you can help someone who is also in doubt. Let's go on this tax journey together!

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December 7th, 2024