Workers in a dependency relationship have until January 31 to present their projection of personal expensesand obtain a reduction in the income tax that corresponds to 2023. In addition, you can define how much deducted from monthly salary from this month for this tax.
The maximum value of these expenses is equivalent to seven basic family baskets and the December one is taken into account, which was $763.44. Thus, it is calculated that the projection of expenses will have a ceiling of $5,344.08.
The basic tax-reduced fraction for this year is $11,722, this is updated every year based on the Consumer Price Index and that also adjusts the section and reduction of personal expenses. This basic fraction is taken into account for determine if the taxpayer can apply the 10% or 20% reduction.
If the gross income of the taxpayer (all remunerations, including tenths, reserve funds) does not exceed the equivalent of 2.13 basic fractions —in this case, $24,967.86—, may discount 20% of personal expenses from the tax; and, if it exceeds that value, you can only apply 10% of said expenses.
For one case and the other, the formula is applied: R= L x 20% or R= L x 10%, where R is the reduction for personal expenses, L is the value that is lower between the projected personal expenses of the annual fiscal period and the value of the basic family basket multiplied by seven.
Download the personal expenses projection form here
The personal expenses that will be considered for the calculation of the reduction correspond to those made for the concept of: housing, health, food, clothing, tourism and education, including in this last category the concepts of art and cultureprovided that such expenses are supported by validly issued sales receipts and that they are in the name of the taxpayer or his dependents.
How to fill out the form:
In this declaration of personal expenses to be used by the employer in the case of income in a dependency relationship, the following must be stated:
- The fiscal year: 2023
- City and date of delivery reception
- Worker ID number
- Surnames and names
- projected income
- Projected expenses: housing, education, art and culture; of health; of clothing; feeding; of tourism.
- Income tax reduction for projected personal expenses
- RUC of the withholding agent (employer) and its company name
- Employer and worker signatures.
In the box of projected income Gross receipts are listed. No exceptions are made here, the taxable gross income and also the exempt income are added, since this is only to calculate the reduction and not to calculate the amount of tax to be paid. That sum of gross income is the guideline to know how much you can have rebate.
- If the gross income is greater than 2.13, the basic deductible fraction of $11,722, that is, if you earn more than $24,967.86 per year, you have the right to use a 10% discount. This percentage is applied to the value presented as personal expenses or to the value of seven basic baskets that are $5,344.08, whichever is less, that is, the discount limit is $534.41. For example: if a person earns $50,000 and wants to project $10,000 of personal expenses to have a 10% discount on that $10,000, that is, reduce $1,000 in their tax, they cannot do so because the maximum in this case is $534 .41 discount.
- Those who earn less than $24,967.86 a year can reduce their tax by 20% in the same way: the lower of their projected personal expenses and seven baskets. For example: for a person who earns $20,000 and wants to project $4,000 in personal expenses, his discount is 20%, which is equivalent to $800. But if he wants to project $10,000 in expenses, he can no longer deduct 20% of that value, but 20% of the maximum of seven baskets, that is, that its rebate limit is $1,068.82.
In the boxes of the projected expenses The amount estimated to be spent is placed in:
- housing expenses
- Education, arts and culture expenses
- health expenses
- clothing expenses
- Food expenses
There are no limits for each of these expenses anymore. Before there were, but now the limit is in the sale. In these boxes you can enter expenses of any value.
You can also write down a single expense, such as $6,000 in education, and that is enough because it completes the limit established for this 2023, which is $5,344.08 (seven basic baskets). Or also itemize $1,000 or $2,000 in food, clothing or other expenses. (YO)
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