Opinion – Marcia Dessen: Main operational and strategic errors related to Income Tax

Falling into the fine mesh of the IRS is not a good thing. There is a high chance of increasing the tax amount or taking a long time to receive the refund, which may be less than expected.

To try to reduce the tax, the taxpayer may be tempted to omit certain income or increase the amount of a deductible expense, trusting that the IRS will not find out. Read mistake. The Revenue receives information from both who receives and who pays income and can easily cross-reference the information.

With the cooperation of the lawyer Luciana Pantaroto, I bring some of the most frequent operational errors that lead the declaration to the fine mesh, being necessary to correct the wrong information to release the declaration of the fine mesh.

operational errors

Declare the payment of medical expenses with an amount different from the one actually paid to the service provider, who is also obliged to inform the IRS of the amount received from the taxpayer.

Error or omission of income from rentals is another example that the IRS system easily identifies. The tenant informs the amount paid in the “Payments Made” form; the owner must inform the same amount on the “Taxable Income Received from PF” form. And, when the property was rented through a brokerage firm, the three declarants report the same information.

Taxpayers who pay child support can make two mistakes: a) include the person being supported (pension beneficiary) as a dependent; b) declare values ​​different from those contained in the court decision or in a public deed.

Forgetting to declare the amounts withdrawn from private pension plans. Those who opted for the progressive table inform the total amount (principal + interest), if PGBL, or interest only, if VGBL, in the taxable income form. Those who opted for the regressive table declare on the income sheet subject to definitive taxation. In both cases, it is essential to follow the income report sent by the plan administrator.

Failing to pay the income tax on the profit earned on the sale of shares and real estate funds on a monthly basis; It is up to the taxpayer to determine the net capital gain and collect the tax, when due.

Declaring exempt income from the sale of shares on the stock exchange or over-the-counter of up to BRL 20 thousand/month and up to BRL 35 thousand/month for other assets in the variable income form causes the Revenue system to charge tax on the profit of the operation; the capital gain must be declared on the exempt income form. Day-trading (buying/selling on the same day) is not exempt, regardless of the selling price.

Failing to declare exempt income, such as donation, can cause an inexplicable evolution of assets. By declaring the donation on the exempt income form, the taxpayer is able to justify the origin of the resources that resulted in the growth of the patrimony, the purchase of a property, for example.

strategic mistakes

In addition to operational errors, there are strategic errors that can lead to tax-exempt income. Let’s look at some examples.

In relation to contributions to pension plans of the PGBL type, two strategic errors can occur: a) not investing and failing to benefit from the postponement of tax payment and possible reduction of the tax burden if they opt for the regressive table; and b) investing more than 12% of gross taxable income generates double taxation on the excess amount, in the year in which the contribution was made and when the redemption is made.

Contributors with serious illness are tax exempt on retirement income, including private pension income. It is worth knowing the conditions and claiming this exemption before the IRS.

Failing to benefit from the tax exemption on capital gains earned on small sales, up to BRL 20,000/month for shares on the stock exchange or over-the-counter and up to BRL 35,000/month on other assets (investments abroad, vehicles, objects art, crypto assets, etc.). Attention, the limit refers to the sale value, not the capital gain, a mistake that generates tax on income that could be exempt.

Failing to add the expenses admitted by the Federal Revenue to the property acquisition value. This omission increases the amount of IR due on the capital gain when the property is sold.

Anyone who buys a residential property before selling the current one loses the tax exemption on the capital gain earned on the sale of the property and pays tax that could be avoided: 15% on gains of up to R$ 5 million or between 15% and 25% on gain over R$ 5 million.

Avoid paying Income Tax beyond what is required by knowing and applying tax rules.​