Some people find it complicated, but I learnt to like this time of the year – taxes. This is a time to review carefully what you have earned, how much your paid in fees (bank, Paypal, etc.), how much of your income you dedicated to tools and other translator’s toys.
However, being Brazilian and still not knowing how it works in other countries, this will be a post dedicated to Brazil taxes. If you’re not interested in knowing how this works, don’t worry, I’ll see you next week! But just in case, here’s a good text on taxes in the USA.
Today it all begins – you can start uploading your tax declaration to Receita Federal (RF). You can download the programs directly from their website. Remember you have to download one program to complete the form (IRPF) and another program to send it over to RF (Receitanet). If this is your first time, I’d advise you to read their instructions and tutorial, just to be safe. And since this is not meant to be a tutorial, if you need extra help, google “tutorial IRPF” and you will find plenty of information.
Wait! Before downloading, check if you have to declare taxes – that is, if you, for instance, received over R$ 24,556.65 taxable, or over R$ 40 thou exempt, not taxable or taxed exclusively at the source. There are other conditions, please check here to see them all.
Now that you concluded you have to declare, download everything. Once you finish installation, if you chose to add icons to your desktop, you should have these two icons. You should start with the one on the right.
And what is the difference between the options “completa” and “simplificada”? For the declaration “simplificada”, the standard deduction of 20% is already applied, regardless of your expenses (with a limit of 20% for R$ 14,542.60). You also don’t need to provide receipts for the expenses (medical, for instance). For the “completa”, you have fixed amounts that can be deducted – for education, for instance, the limit is R$ 3,091.35 per person. You can see the progressive table here. But not all types of courses can be included for deduction, extracurricular education is off the table.
You probably remember that until 2005, you had to deliver a printed form completed by pen, or you could complete it in a weird version of MS Word and hand in a diskette with your data. Now, you don’t have to complete the same data over and over, you can choose to import your data from last year’s declaration – if you used this system previously, of course.
In case you didn’t, good news as well! You’ll be able to import it next year. It’s always better not to need to keep looking for all your documents (you know you need everything – RG, CPF, título de eleitor, CTPS – right?) to complete this.
In case you did, remember to recheck all the data, as there are a couple of fields you need to complete (such as “Houve mudança de endereço?”).
If you are working under contract, with your CTPS signed, then you have probably received (or you will receive soon, start asking for it) a form displaying a few items (such as 13th wage) you should declare, since the company will also declare it to the RF and this information is cross-checked. This makes things easier.
If you’re an autonomous worker living in Brazil and receiving payment from foreign agencies, you should be completing a Carnê-Leão (you can see how it works here, and in this case, you can transfer everything automatically, directly to your form in the tab “Rend. Trib. Recebidos de PF/Exterior”. In case you have not done so, you will to have to complete this tab manually, and this will take you some time. Be careful not to lose track.
To make things easier (including for myself), I listed what is mandatory and what can be added, especially to reduce the final amount to be paid. Remember: you can only list for deduction legitimate expenses related to your business.
What you must declare:
- Income via Paypal, wire transfer or check
- Bank account status (your bank probably provides you a summary that you can download)
- Assets (house, car, etc.)
What you can declare (to deduct):
- Bank fees (look for “extrato anual de tarifas”)
- Paypal fees (go to Minha conta > Histórico de transações > Baixar histórico and make the specifications to download it in your preferred format)
- Profession-related expenses (conferences, tools, webinars)
- Health and education-related expenses
Paypal is a bit tricky, since you’ll have to go through your received payments one by one to check the fees paid. But here’s a trick that usually works: if you fail to keep track of the fees, you can download the history in a Quicken format (.qif) and import it to GNU Cash. The labels displayed in Paypal will be automatically added to your GNU account, but you do have some trouble finding different labels for the fees. However, it is less trouble then going through each transaction, I think. Of course, it all depends on how much do you use Paypal – if you only have about 10 transactions, you can go one by one. But if this is your main way to receive payment and you have been working a lot… Well, let’s cross our fingers this works – GNU can simply excludes a label here and there.
The IRPF software is very complete and full of options (and help!), so that declaring your taxes does not become a burden. It even checks itself for errors, displaying any attention warnings if anything is incorrect (but not incomplete, so be careful).
NOTE: print the documents that support your tax declaration and keep it in your records, including a copy of the declaration itself. The RF can request you to prove the amounts deducted, and in case of failure, you will have to pay a fine.
Next year, things can probably get interesting, since RF intends to complete our data all by itself (for the declaration “simplificada”). The news about this is here.
About Michele Santiago
Translation, localization, editing, subtitling. 7 years of experience in English and Spanish into Braz. Portuguese, specialized in Medical, Pharma and IT. Love rainy days, travelling and gadgets. Not necessarily in that order.