The deadline for declaring income taxes in Brazil is approaching, with the Receita Federal announcing the filing period for the Imposto de Renda (Income Tax) set for March 15 to May 1, 2025. Taxpayers must stay vigilant as common mistakes can lead them to the dreaded "malha fina," or audit, resulting in fines and complications.
Among the most frequent errors reported by the Receita Federal include:
- Omission of Income: Failing to declare own income, dependent income, or income from additional sources such as temporary jobs, rent, or investment returns can lead to serious penalties. To avoid this, taxpayers should thoroughly cross-reference their income with statements from payers.
- Typing Mistakes: Simple errors like incorrectly entering decimal points can significantly alter declared amounts. A digit mix-up where R$1,000.00 might be mistakenly entered as R$100.00 can trigger red flags. Reviewing all data before submission is imperative.
- Misaggregation of Earnings: Mistakenly categorizing taxable income as exempt or vice versa is another issue. All income sources must be classified correctly, as outlined by the Receita Federal's guidelines.
- Failure to Include Dependent Income: It is also necessary to report the income of dependents, such as their scholarships or pensions, to avoid discrepancies.
- Unproven Medical Expenses: Taxpayers must keep valid receipts for all medical deductions—they cannot just claim expenses without proof. During audits, lacking documentation will likely lead to disqualification of these deductions.
- Incorrect Banking Details: Providing incorrect bank account information for tax refunds could delay payment for up to one year, as funds will sit at Banco do Brasil.
- Declaring Non-Applicable Dependents: Incorporation of dependents needs to reflect actual legal obligations. Declaring dependents who do not qualify or are counted on multiple tax declarations can attract penalties. It's best to agree with any co-parents or custodial partners about whose return will include shared dependents.
- Invalid Deductions: Only expenses explicitly allowed by law can be deducted on the return. Taxpayers should reference the Receita Federal’s approved list before listing any deductions.
- Last-Minute Filings: Filing late increases the chance of making errors. Starting early provides ample time for revision and potentially ensures eligibility for early refunds.
The Receita Federal has indicated some other common pitfalls to avoid, such as inaccuracies with CPF numbers (Cadastro de Pessoas Físicas), birth dates, improper declarations for dependents, or invalid election titles.
The filing season for the 2025 Income Tax Declaration is anticipated to attract many inquiries about dependents. The inclusion of dependents can provide considerable tax benefits, with deductions of up to R$2,275.08 per dependent. Notably, all income from dependents must also be declared, which may affect the total tax due.
Defined by the Receita Federal, qualifying dependents can include:
- Spouses or partners without income limits.
- Children or stepchildren under 21 years old, or any age if they are incapable of work.
- University or technical students up to 24 years old.
- Siblings, grandchildren, or great-grandchildren under 21 or incapacitated.
- Parents, grandparents, or great-grandparents with incomes up to R$24,754.74 for the previous year.
- Underprivileged minors up to 21 years old who are raised legitimately by the taxpayer.
- Individuals with intellectual disabilities for whom the taxpayer serves as legal representative.
Taxpayers must utilize one of three filing methods: via the Programa Gerador de Declaração (PGD) available for download, the online Meu Imposto de Renda portal, or the mobile Meu Imposto de Renda app. Necessary documentation includes individual income reports, proof of deductible expenses (like medical or educational costs), identification for both taxpayer and dependents, and detailed accounts of assets.
Failure to file on time can lead to substantial consequences. Those who miss the deadline will incur penalties of 1% of the owed tax per month, with minimum fines established at R$165.74. It is imperative for individuals to prepare with all due diligence. The Receita Federal has yet to fully announce the rules and schedule for filing, but getting ready well before the rush could streamline the experience and potentially maximize refunds.
Taxpayers are encouraged to stay informed and prepared as the 2025 tax season approaches, ensuring they adhere to the regulations and efficiently file their income taxes to avoid penalties and enjoy the potential benefits of rightful deductions.