All self-employed people are clear that those who pay to the Treasury in personal income tax are linked to the expenses that they declare as deductible, and that therefore it is very important to know all the concepts that can be deducted from income, and that works at home or outside of it.
One of the main points that a self-employed person must take into account are the deductible expenses that can be included in the quarterly VAT declaration.
For this, we have made a list with the requirements and types of expenses that you can deduct, whether you work from home or outside of it.
What general requirements must the expenses have in order to be deductible?
Basically it can be said that the expenses must be related to the economic activity that is carried out, and we could give many examples, such as the case of someone who is dedicated to teaching music, expenses that are related to the necessary material can be deducted. to teach classes, musical instruments, etc., but obviously a washing machine or a kitchen cannot be deducted, since it is not considered an element that has to do with the functions it performs.
But that's not all, since in addition, expenses must be justified through invoices and purchase receipts. It is very important that we keep these documents if we want to deduct any type of material that we have needed for the business.
Finally, expenses must be recorded in the expense and investment book. Once these requirements are met, the self-employed person is one step closer to being able to include these procedures in their declaration.
What are the expenses that a self-employed person can deduct for tax purposes?
There are different types of deductible expenses:
Exploitation: In this section the freelancer can include any purchased materials that you need for the development of the business activity (once again, our graphic designer and his graphic tablet).
Social Security: If a worker's contribution depends on the self-employed person, the 50% can be deducted in the event of sick leave due to common contingencies.
Salaries and salaries: This includes the payment that the self-employed person makes to workers in the form of extraordinary payments, per diems, work trips, accident insurance, training, etc.
Transport: As long as the vehicle used by the self-employed person is used for business activity, they can deduct all their expenses. From gasoline to any type of repair that has to be done, yes, everything must be correctly justified before the Treasury.
Taxes: VAT may apply to purchases of products or services made by the self-employed person and justified by business activity, such as gasoline, meals in restaurants, etc. To do this, you must present itemized invoices.
Leasing and repair: Facility maintenance (if you have rented premises or land) may be another deductible expense.
External services: If you need a service adjacent to the company, such as a notary, lawyer, commercial commissions or a publicist for our designer, the freelancer can justify this extra as another deductible expense. Like office expenses such as electricity or water.
What if the self-employed person works from home?
If you are self-employed and work from home, there are a series of expenses that you can deduct, as long as they are caused by the performance of your professional activity (Internet if you need to take online courses, for example). The deductible amount depends on the number of meters from the address where you carry out your work and whether the home is rented or owned by you. The essential thing, if you are self-employed both from home and in an office or other place, is that you can demonstrate to the Treasury each expense that you want to deduct, since otherwise, you will not be able to deduct said consumptions.
If the home is rented: The self-employed person may deduct the proportional part that he dedicates to carrying out his work from the monthly rental amount, the proportional part of the income; the purchase of the necessary material to carry out the activity (computer equipment, etc.). In relation to supplies (water, electricity, gas and heating), if you do not have two meters, one for the house and another for the space dedicated to work, you will not be able to deduct the supplies, so if you are going to work from home, Ideally, you should separate these expense channels.
If the home is owned You may deduct the main part that is directly related to the development of the professional activity; such as community expenses, depreciation of the property, mortgage interest, home insurance, local taxes such as the IBI or urban waste collection services, purchases of the material necessary to carry out your work, etc.
Although the year has practically ended, you still have time to incorporate those expenses that you have not deducted during the year and that can save you a lot on your tax return.
If you want us to inform you, Contact our tax experts and they will be able to advise you what you should do to be able to deduct them in this last quarter, and thus have a positive impact on your personal income tax return.
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