The Register of Tax Advisors Economists (REAF) has presented its recommendations for taxpayers to take advantage of all the possibilities at their disposal to make the Income Tax Declaration 2019.

Since April 2, it is now possible to present the income statement 2019. In fact, some 600,000 people took the first day of the Income campaign to make their declaration, which is 30% more than the previous year.

However, many taxpayers are still reviewing their drafts while the deadline to comply with the annual IRPF adjustment, which expires on July 1, continues. If you are within this group, you are still in time to apply the recommendations presented by the Register of Tax Advisors Economists on Tuesday to take full advantage of your personal finances in the Income Tax return.

The president of the REAF, Jesus Sanmartín, has been responsible for explaining these tips, which are to review that all data on income, expenses, deductions and other tax benefits are correctly reflected and check whether the conditions of any tax benefit have been broken applied in previous years, in addition to questions about income of deceased in 2019 or work.

In this way, these are the 8 recommendations of the REAF to get the most out of your Income Tax return:

1- Review the data of previous statements that have an impact on 2019

The REAF experts point out that it is necessary to take into account:

  • Property losses of the previous 4 years
  • Negative capital gains from the previous 4 years
  • Negative tax base for the previous 4 years
  • Contributions to pension plans and similar that could not reduce the tax base in 5 previous years
  • Earnings from previous years, if you chose to impute them according to the enforceability of the collections

2- Check if the fiscal benefits conditions of previous years have been breached

Those who have not fulfilled the following benefits will be obliged to present a complementary declaration:

  • Reinvest the money obtained from the sale of the habitual residence within a period of 2 years to leave the capital gain exempt
  • Reinvest the money obtained from the sale of shares in companies of new or recent creation within a period of 2 years to leave the capital gain exempt
  • In the case of those over 65, reinvest the money obtained from the sale of any property or right that is intended to create a life annuity to leave the capital gain free within a period of 6 months.
  • Maintain for 3 years the ownership of the shares that have been received as remuneration in kind for the work so as not to have to pay for them.
  • Not to return to work in a company from which compensation has been received in the 3 years following the dismissal
  • Repurchase within one year of assets or shares or shares that do not quote, when the losses of that transaction have already been integrated into the base.

3- Check if the conditions of tax benefits that must be regularized in this statement have been breached

This case occurs when the non-compliance occurs in the fiscal year for which the tax is paid, adding the fee that was left unpaid and the interest for delay that corresponds. It applies in case of:

  • Maintenance in a minimum period of 5 years of shares or participations for the integration of a unemployed person in an entity, when there was a single payment of the unemployment benefit
  • Return of interest for application of the floor clauses, which were the basis for the deduction for the acquisition of housing, state or autonomous, in non-prescribed periods. Experts remember that it is necessary to integrate the amount deducted in past years that corresponds to these interests already returned, but interest on late payment does not apply
  • Deduction for investment in companies of new or recent creation in previous years when the requirements have been breached in 2019
  • Non-compliance with the deduction requirements for business investment
  • Revocation of donations to beneficiary entities of the patronage that generated a deduction
  • Loss of the right to deductions for investments or expenses in goods of cultural interest and for actions for the protection and dissemination of the historical artistic heritage for non-compliance with the requirement of permanence of assets in the estate for 4 years
  • Failure to comply with the term of 3 years of housing occupation or 4 years of completion of works for the application of deductions for acquisition of state or autonomous housing, for construction, expansion or rehabilitation of the habitual residence or for the works of adaptation of the Habitual housing for people with disabilities

4- Choose the deductions and criteria that depend on your situation as a taxpayer

The REAF points out that there are options for taxpayers in specific cases that are binding and must be weighed. They are applied in the following situations:

  • Choose to be taxed by cash criteria in the case of entrepreneurs or freelancers who determine the net return in direct estimation and can fulfill their accounting obligations by carrying only fiscal records. That decision is binding for 3 years
  • Choose between joint or individual taxation
  • Impose as payments are required in forward transactions
  • Apply the minimum by descendants or special treatment of annuities for food to children
  • Apply the abatement coefficients to reduce the capital gains that are generated by transmitting in 2019 assets acquired before 1994. This advantage is limited to 400,000 Euros for life
  • In the case of those over 65 years of age, apply the exemption of the profits obtained in any good or right if the money from the sale is reinvested in creating a life annuity. The maximum bonus to reinvest is 240,000 Euros
  • Choose how many balances from previous years will be offset this year
  • Choose the amount of depreciation freedom

5- Apply the advantages linked to commuting for work

It is advisable to keep the evidence of travel expenses and allowances, such as public transport tickets, toll or parking tickets, accommodation bills, because the Treasury can request them. In the case of maintenance and mileage allowances, it will be the company that must prove the conditions of travel.

In the event that you apply the exemption for work outside of Spain, the experts recommend to keep supporting documents for the work carried out abroad and the data of the company for which they were made, for leaving the national territory and for calculating exempt amounts. .

6- Recommendations for heirs of deceased in 2019

When making the declaration of the income of a deceased family member last year, their heirs must take into account:

  • It is mandatory to impute all pending income
  • If the death occurred before July 5, 2019, the increase in the reduction of work income and deductions for a dependent spouse and the supplementary one for a large family cannot be applied.
  • If the death occurred before 2019, but last year a sentence was issued in your favor that generates an income, this income must be recorded in a complementary statement corresponding to your year of death.

7- Review the fiscal data that appear in the draft

The REAF experts recommend paying special attention to this data when reviewing the draft:

  • Family and personal circumstances, if they have changed in 2019
  • Individualization of income and income that can be totally attributed to you but that may belong to other holders
  • Remuneration for teaching courses, conferences or seminars, which may erroneously consist of performances of professional activities or work performance.

8- Check if your estate has increased in 2019

If throughout the past year your wealth has grown, it is necessary to verify that it does not exceed the income received, which would indicate that you have forgotten income to be declared.