How do I file my annual SAT return?

We can't lie, many of us are nervous about the SAT, the annual tax return and all its implications. 

Many, many questions haunt our minds, such as: 

• What do I have to declare? 
• How do I do it?
• Do I have to hire an accountant or can I do it myself?

But in reality, we can shake off those nerves if we inform ourselves a little. What's more, we can even come out "winners" if we carry out all the processes well and properly.

In this article we will tell you what it is and how you can make your annual tax return, easily and without complications.

What is the annual statement?

The annual tax return is a tax obligation where you present a summary of the income and deductions you obtained during the year. 

With this data, the annualIncome Tax (ISR) to be reported to the Tax Administration Service (SAT) is calculated , which may result in an amount payable or in favor.

The SAT sets the last day of April as the deadline for filing the annual tax return, and in this 2022 we have the novelty that we can do it completely from the comfort of our homes from its web platform, of which we leave you the link:

https://www.sat.gob.mx/personas/declaraciones

If we go into the details of the Income Tax Law (LISR), in its Article 150, we find that:

"Individuals who obtain income in a calendar year, with the exception of exempt income and income for which definitive tax has been paid, are obliged to pay their annual tax by means of a return to be filed in the month of April of the following year, before the authorized offices."

What should be included in the annual return?

According to the format requested by the SAT, the annual return must include:

• Revenues
• Personal deductions
• Provisional payments
• Withholdings

Who is required to file an annual tax return?

Although in this article we will focus on salaried employees, it is important to mention that this report must be made by all individuals and legal entities.

So, going into our business, we have that the employees who obtain their income exclusively from salaries, must file their tax return when:

• Have worked for two or more employers in the year.
• They stopped working before December 31.
• Work for employers who are not required to withhold income tax (international organizations, embassies and consulates of foreign countries).
• Have income greater than $400,000 pesos for the entire year.

Which cases are exempt from filing your annual return?

If we again quote Article 150 of the Income Tax Law (LISR) we have that:

"They may choose not to file the return..., individuals who only obtain accruable income in the fiscal year for the concepts indicated in Chapters I and VI of this Title, the sum of which does not exceed $400,000.00, provided that the income from real interest does not exceed $100,000.00 and on such income the withholding referred to in the first paragraph of Article 135 of this Law has been applied."

Therefore, if your income during a year was less than $400,000 pesos, you may not file it. Although, of course, doing it anyway may result in a favorable balance, so the SAT will return you the amount of such balance in favor.

Steps to file your annual tax return

Believe it or not, in 3 steps you can create your annual tax return summary. A lot depends on gathering data, and having all your documents in order.

Step 1: Get ready

You will need:

• RFC
• Access password to the SAT portal (CIEC).
• E.firma (Advanced electronic signature), for when you have a credit balance greater than $10,000 and you have to modify the CLABE account that the SAT has registered.

Documents to be collected and organized

• Payroll receipts: If the company where you work has an HR platform, you can download them from there. If not, you can request them directly to the Human Resources or Accounting area. 
• Vouchers for personal deductions.
• Consult the Payroll Voucher Viewer for the worker in the SAT portal and check that the information matches your payroll receipts(https://www.sat.gob.mx/declaracion/97720/consulta-el-visor-de-comprobantes-de-nomina-para-el-trabajador).
• Consult the Personal Deductions Viewer in the SAT portal and check that the information matches your personal deduction invoices(https://www.sat.gob.mx/declaracion/94574/consulta-el-visor-de-deducciones-personales).

What can you deduct?

• Medical, dental, nursing and hospital expenses, including rental or purchase of appliances for rehabilitation, prosthesis, analysis and clinical studies.
• Prescription optical lenses for up to $2,500 pesos.
• Funeral expenses.
• Payments for medical insurance premiums.
• Actual interest actually paid during the year on home mortgage loans.
• Donations.
• Mandatory school transportation.
• Voluntary contributions to the retirement fund.
• Tuition (preschool through high school).

Step 2: Let's declare

1. Enter the SAT portal: www.sat.gob.mx
2. Choose: People (from the button in the upper left corner).
3. Click on "Declarations" (from the gray menu).
4. Select "Annual" and (when the menu is displayed) click on "File your Annual Return for individuals".
5. Find the Start button and click it.
6. Enter your RFC and password or use e.firma.
7. Choose "File tax return: Fiscal year 2021".
8. Capture the information in the boxes marked in red.
9. Check your balance due or payable.
10. Send the declaration, if necessary use your e.signature and download your acknowledgement.

Step 3: Do you have any payment or refund (credit balance)?

Payment

• Single payment: with your capture line you can pay by electronic transfer or at the bank window.
• Payment in installments: up to 6 monthly payments. Interest is added.

Return

• Balance offset: pay a subsequent tax using this balance.
• Balance refund: You need a password or e.signature depending on your case.
  • Saldo <= $10,000: Contraseña
  • Saldo >$10,000 y <$150,000: Contraseña o e.firma
  • Balance >$150,000l: e.firma

Avoid these mistakes when filing your annual tax return

There are several aspects that we can take into account to make our annual tax return "error-proof". Here we can name some of them and if you have had experience with others, we invite you to write them in the comments.

• Misspelling items: Look carefully at the concepts when you write them, because changing or confusing words can be grounds for a voucher to be invalidated.

• Leave aside the details: Always verify that the data in the forms corresponding to your regime are correct. Check from the most basic data such as your name and RFC, to the amount of ISR (Income Tax) and the amounts you write.

• Declaring false information: The legal measures for declaring false information range from financial penalties to imprisonment for fraud. The tax law considers fraud:
  • Using false documents.
  • Failure to issue receipts for activities performed.
  • To declare false data for the compensation of contributions.
  • To provide false information to credit contributions.
  • Omit contributions.
  • Declaring non-existent tax losses.

So now you know, shake off your fear of the SAT and get ready to file your annual tax return.

Of course, if you have any doubts, it never hurts to consult an accountant or expert.