Is this the first time you are going to declare income tax?
So, see in the guide below the meaning of the main terms used by the IRS and follow some tips to fill the declaration correctly:
1) Income Tax
It is a tax that the government levies on people’s earnings, such as salaries, rents, retirement, pensions, lottery prizes, etc. The amount is paid according to income (whoever has a lower income pays less, and whoever earns more pays more tax).
The tax is deducted every month from salary and other income. But, once a year (between March and April), the taxpayer needs to send the declaration to the IRS to see if he paid more or less tax than he should. For this reason, it is also known as the annual adjustment statement. You must enter the data for the previous year. In other words, in IR 2021 the gains and expenses recorded during 2020 are placed.
To calculate how much the worker should have paid in tax, the Revenue adds the income he had and deducts a portion of his expenses (these are called “deductions”). The final value is compared to a table. This table determines the percentage (rate) of income tax that he must pay.
Some expenses made during the year can be deducted from the tax return, which means that the taxpayer pays less tax. These are called deductions. It is possible to deduct expenses with health (health insurance, doctor etc.), education (school, college etc.) and dependents, for example.
5) Tax refund
If the IRS sees that the taxpayer has paid more tax than he should, he is entitled to a refund, that is, to receive back part of what was paid. If the declaration has no problem, this refund will be paid by the Federal Revenue Service until September. Generally, whoever submitted the declaration at the beginning of the term receives the refund earlier.
6) Tax payment
If the IRS sees that the taxpayer has paid less tax than he should, he will need to pay more. The amount will be informed at the end of filling out the declaration and payment can be made by bank slip or automatic debit until the end of the declaration delivery deadline. It is also possible to split the amount payable.
Deceiving the IRS is a crime. This is what is called tax evasion. If caught, the taxpayer can pay a fine of up to 150% of the tax amount he owes and even serve a sentence of two to five years in prison. If the IRS believes that you did not act in bad faith, that is, you did not make a mistake on purpose, it will only charge the tax that it is owed with interest and correction.
8) Malha fina
The IRS, whose informal symbol is a lion, uses computers to cross information. For example, the company informs the IRS how much it paid the worker a salary. If it declares a different value, on purpose or unintentionally, computers show it. Then, your statement falls into the so-called “fine mesh”. That is, it will be examined in detail and the taxpayer can be asked to explain himself.
Anyone who errs or forgets to inform any data in the declaration can make the correction, that is, the correction of the information for a period of up to five years. Making the correction before the IRS realizes the error is better because it shows the good faith of the taxpayer. To make the correction, it is necessary to fill in a rectifying declaration, using the same program for sending the declaration. If the IRS realizes the error beforehand, the taxpayer may be called in to provide clarification.
It is possible to complete and send the declaration yourself, by downloading the Federal Revenue program on the computer. The program has a series of filling guidelines. Just access the “help” menu. But, if you have difficulty, the taxpayer can hire the services of an accountant, which will be paid.
11) Who declares
You are required to declare who had taxable income (such as salary) that, added together, increased from R $ 28,559.70 in 2020. Who received exempt, non-taxable or taxed income at source (such as savings or withdrawal from the FGTS) of more than R $ 40k also needs to be sent. Those who traded shares on the stock exchange, had assets (such as a house) above R $ 300 thousand or had revenues of more than R $ 142,798.50 in rural activity must also declare.
12) Complete or simplified model
The tax can be calculated based on two tax models: the complete or the simplified. In general, those who have a lot of expenses to deduct, such as expenses with education and health, either for themselves or for dependents, should opt for the complete model, which allows a greater reduction of the Income Tax. The simplified model is used by those who have few deductible expenses. It is enough to fill in all the fields of the declaration that the program itself shows, at the end of the filling, which is the best option to pay less tax or receive a bigger refund.
13) What to declare
It is necessary to put in the declaration everything that the taxpayer earned (such as salaries, pensions, rents), the assets he owns (such as a house and car) and what he paid for (such as school and health insurance) last year.
Salary (including vacation), retirement, pension and rental income are earnings that must be declared as “taxable income”. Lottery prize and 13th salary are income taxed at source (“exclusive / definitive taxation”). Savings, indemnities and unemployment insurance are reported as “exempt and non-taxable income”.
15) Without registration
Even those who do not have a portfolio record, such as service providers or self-employed workers, may have to declare Income Tax if they fall under one of the rules established by the Federal Revenue Service, such as having received taxable income above R $ 28,559.70 in 2020.
The individual microentrepreneur (MEI) must also declare Income Tax, if it fits the situations that require sending. In addition, he needs to submit his company’s statement (DASN-Simei) every year.
The taxpayer may have a discount for spending on people who depend on him, such as children or parents. Revenue determines a fixed amount to be discounted with each dependent (R $ 2,275.08). In addition, expenses with education (up to the limit of R $ 3,561.50 per person in the year) and health (without limit of value) for dependents can be reduced.
Those who pay rent cannot deduct this expense from the Income Tax, but must inform the amount in the declaration. The IRS will cross-check your information with the amount informed by the owner of the property that receives this rent. If you own a property and receive rent for it, you need to declare that income on the “taxable income received from individuals” form.
19) Checking and savings account
The taxpayer must also declare the amount he had in the bank (checking or savings account) on the last day of 2020. This information is only required if the balance on that day exceeds R $ 140.
The amounts that the taxpayer will place in the declaration are those informed in the income vouchers (salary, bank balance, retirement etc.) and payments (health plan, school, private pension, etc.). Companies send these reports by letter, e-mail or post them on their websites for you to download the document.
21) Additional data
It is necessary to have some important data in hand, such as the number of the agency and the account in which the refund will be deposited, if the taxpayer is entitled. Those who have dependents must have their data, such as full name, CPF and date of birth.
It is necessary to download a program to fill out and send the declaration of IR 2021. Whoever had gains with the sale of real estate in 2020 needs to download a specific program, of gains on capital (GCAP 2020).
The declaration must be completed based on the data provided in the vouchers. The income statement of the company for which the taxpayer works, for example, will provide data such as “total income received” and “Income tax withheld at source”. There are fields with the same specifications in the declaration.
Every year, taxpayers usually have about two months, until the end of April, to send the statement to the IRS. Those who declare earlier also have a preference when it comes to receiving the refund, if they are entitled.
25) A lot
Whoever misses the deadline for sending the declaration needs to pay a fine to the IRS. The minimum is R $ 165.74, and the maximum, 20% of the tax due. The fine for those who put wrong information or fail to put important data on purpose (evasion) is 150% of the tax due.
26) Tablet e smartphone
In addition to the computer, filling and sending the declaration can be done on the tablet or smartphone. However, for those who are going to declare their income tax for the first time and need to inform a lot of details, filling out the declaration on these devices may not be the best option.
Print a copy of the declaration and keep it with the receipt number and all your income and payment receipts for five years. It is the period in which the IRS can question your declaration. To make it easier to complete each year, keep in a folder all the receipts and payments you make during the year (salaries, college, doctor’s appointments, rents, etc.). Also, save a digital copy of the previous year’s statement to your computer. It is possible to export the main information (such as assets and dependents) for the following year’s declaration, saving time in filling it out.