What are the most common mistakes at Individual’s IR Statement preparation?

The 2018 Individual’s Income Tax Statement (Declaração de Imposto de Renda de Pessoa Física - “DIRPF”) (base year 2017), whose deadline extends by April 30, requires a lot of attention and organization for taxpayers who wants to be free of the fine mesh.

22/03/2018

HIGHLIGHTS

What are the most common mistakes at Individual’s IR Statement preparation?


The 2018 Individual’s Income Tax Statement (Declaração de Imposto de Renda de Pessoa Física - “DIRPF”) (base year 2017), whose deadline extends by April 30, requires a lot of attention and organization for taxpayers who wants to be free of the fine mesh.

The best for those who are required to file the statement is to have in hands all necessary documents before starting to fill it (income reports, bank statements, proof of payment, etc.), besides not to start at the last minute.

Although still optional, in this year's statement there are fields to detail assets, such as address and real estate’s IPTU number, and vehicles Renavan number, boats and aircraft. It noteworthy that this information is expected to be mandatory at the next statement.


Common Errors

  • Divergences in cross-reporting: Divergent data between what is stated and what companies have reported to RFB through their other statements, including: DIRF, DECRED, E-Financeira, DMED, DIMOB, DOI, DME, etc. Due electronic data cross-checks, these errors lead the majority of taxpayers to fine mesh. Generally, they are errors easy to correct, but they delay the payment tax refund to that taxpayer;
  • Income omission: Most of taxpayers omit rent, pension and/or retirement income, especially when on behalf of their dependents;
  • Improper deduction of expenses: Taxpayers who increase their expenses in order to minimize the tax due or even increase the value of their refunds. By improving controls, it is increasingly difficult to plead for improper deduction of expenses;
  • Improper inclusion of dependents: Only dependents in the legal provision may be included. In addition, a person's CPF may not appear as a dependent in more than one statement. When two taxpayers share someone's expenses (children, parents or grandparents) they must first agree on who shall include the dependent at IR form.
  • Update assets value: The movable and immovable assets must be recorded at their acquisition cost. The taxpayer should only increase a property value in case of improvements and reforms, provided that they are proven through proper documentation;
  • Problems in informing real estate purchase through financing: taxpayer must report the amounts actually paid by December 31 of calendar year. The taxpayer should report the amounts incurred with the first installment, intermediary and monthly installments paid. In this case, the financing debt balance is not required to report at the Debt table.

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