Did you know that May 2nd, 2023 is the deadline for individuals (persona física) to file their annual income tax (ISR) declaration for the 2022 fiscal year?
Who Must File?
Per Mexican tax laws, individuals that earned income and fulfill the following conditions, are obliged to file an annual ISR declaration:
- Your income falls under the Wages and Salaries category and you have an income of over $400,000 MXN, except for those who obtained it exclusively through salaries during the fiscal year, including over 400,000 pesos from just one employer, as long as the total income is by payroll (CFDI).
- You earned income from two or more employers simultaneously.
- You received income through retirement, pension, redundancy, or some other kind of workers’ compensation. Similarly for those who received other forms of income, such as debts condoned by the creditor or paid by another person, for investments abroad, for moratorium interests, and/or for conventional penalties.
- You received income for professional services (fees), real estate rental, business activities (commercial, industrial, agricultural, ranching, forestry, fishing, and transportation), disposal of assets, and acquisition of assets and interests.
Reducing Taxable Income
Taxpayers can reduce their taxable income by using deductions for legitimate expenses. However, it is important to clarify that not all expenses are deductible. Below is a list of approved deductible expenses in Mexico for individuals (persona física).
- Medical (including hospital expenses, mental health, nutrition services) and dental
- Prescription lenses up to $2,500 MXN per invoice.
- Funeral expenses
- Interest on mortgage loans
- Voluntary and supplementary contributions to the Retirement Savings System
- Medical insurance premiums
- Obligatory school transportation expenses
- Tuition from preschool through high school.
If you earned a credit balance, you can request a refund. The refund process takes about 40 business days after your tax return is filed.