2021 Income Tax Return: a prior organization has many advantages for the taxpayer

For those who want to ensure the reporting of the Income Tax Return timely and accurate, organization is a must-have.

While expecting the consolidation of the Federal Revenue instructions for this year, the taxpayers may and should start planning the compliance of the obligation, to ensure the accuracy of the data that will be transmitted and peace of mind in the reporting process.

Annually, the taxes authorities makes adjustments and brings complementary requirements, but as documents and receipts are expected to be, at least in large part, the same as required in previous years, it is possible and recommended that the taxpayer anticipate the preparations.

The reporting period has not yet been officially disclosed. In 2020, due to the pandemic, the period that normally starts in March and ends at the end of April was extended to June 30. In 2021, it is expected that the fiscal entity will resume the standard period.

Why should the 2021 income tax organization be anticipated?

The organization in reporting is an ally of the taxpayer. Here are some advantages:

Reduction of risk of falling into fine mesh

With enough time to gather the necessary documents and clarify topics that have raised doubts, the taxpayer avoids filling errors that could lead to falling into the fine mesh

Simulations of more advantageous practices

Having all the data, it is possible to evaluate which reporting mode (simplified or full) ensures better returns or lower tax payments. As the data are inserted in the program, a comparison already indicates, which is more advantageous.

Provided that the Federal Revenue rules are observed, it is also valid to use the software to simulate whether it is more advantageous to report separately or together with the spouse and, if opting to present in two reporting, in which one registering the dependents is better, in cases where there are expenses to be deducted.

Making a joint report in one year, does not oblige the couple to maintain this option in the following year, The issue can be reassessed annually, considering what represents the most advantageous.

Simple to correct

The transmission of the return in the beginning of the period gives the taxpayer the chance to correct any inaccuracies that may have been occurred while the taxpayer is still involved in the preparation, not requiring the resumption of the process later on.

Quick return

Organization guarantees more agility in reporting. The sooner the report is transmitted, the faster the taxpayer will receive the refund, if there is a credit to be refund.

Removal of the penalties risk

The individual is subject to the penalty for failure to report, which corresponds to 1% of the annual tax due for each outstanding month, (limited to 20% of the amount). With a proper planning, this risk is removed.

Additional time to clarify doubts and consult experts

Over the years, the taxpayer may have new demands, such as a new dependent, new asset, investments, and other more complex situations. Doubts will arise, but there will still be plenty of time to seek guidance.

Relying on specialized support is a way to ensure a compliant reporting, with no risk of committing failures by omission or unawareness. It is worth remembering that, each year, the Federal Revenue Service improves the mechanisms of data crossing among several sources, increasing the accuracy of its.

Starting point: organizing documents, supporting documents and information

For a correct filling of the report, the taxpayer must gather information, receipts, and documents applicable to the situation. Depending on the case, this includes: