Income Tax: The 5 most common mistakes made by those who fall into the trap

Income Tax declaration can be confusing for most taxpayers. For those who have not yet settled accounts with the IRS, it is important to pay extra attention to avoid mistakes that could lead to fraud.

Simple problems, such as typing errors and inconsistent information about assets, are among the main reasons for tax authorities withholding declarations, according to Santander.

Check out the most common mistakes made by those who fall into the trap:

Typing errors
Among the most frequent mistakes are typing errors when filling out the IRPF program forms. An incorrectly entered number can completely alter the values reported to the IRS.

In extreme cases, an asset worth R$100,000 may be declared, by mistake, as an asset worth R$1 million, which triggers an automatic alert in the inspection system.

Omission of income
Revenue data indicate that more than 40% of declarations retained in the fine mesh show signs of this type of irregularity. The problem usually occurs when the taxpayer reports only the main salary and fails to declare extra earnings obtained from freelance work, consultancy or occasional services.

Income received from rent also needs to be declared, including in informal contracts. This is because the IRS cross-references information between landlord and tenant.

If the tenant declares payments and the owner omits receipts, the inconsistency may result in the declaration being withheld.

Gains obtained from the sale of assets, such as real estate and vehicles, must also be reported. When there is a profit on the transaction, the taxpayer must declare the capital gain.

Confusing PGBL and VGBL
Investors in private pensions need to be aware of the differences between PGBL and VGBL plans. Although similar, they have different forms of declaration.

The PGBL must be informed in the "Payments Made" form, while the VGBL must be included in the "Assets and Rights" section. The exchange of tokens is considered a recurring error by the Revenue.

Declaration of assets
Still in the stock market, another common mistake involves the declared value of securities.

The correct thing to do is to inform the acquisition cost of the shares, that is, the amount paid for the purchase, and not the updated market price at the end of the year.

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Value variation incompatible with income
Revenue also monitors the compatibility between income and equity evolution.

A taxpayer who declares an annual income of R$80,000, for example, but reports the purchase of a property worth R$1 million without indicating other sources of funds, may fall into the fine net due to asset inconsistency.

After declaring, can I adjust errors?
According to the Tax Authority, anyone who identifies errors after sending can submit another declaration that rectifies the previous one. It is necessary to enter the receipt number of the original declaration and use the program corresponding to the year that will be corrected.

Until the end of the official delivery deadline, the taxpayer can even change the chosen taxation model between simplified discount and legal deductions. After this period, rectification remains permitted for up to five years, as long as the declaration is not under inspection by the Revenue.

The Revenue also warns that declarations already submitted to tax proceedings can no longer be rectified. The impediment comes into effect from the moment the taxpayer receives an official subpoena from the agency.

Source: CNN