When we are faced with our tax return for the first time, we are left with many questions. And if that weren't enough, we encounter jargon that makes it even more difficult to understand what we are dealing with.

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The objective of this article is to be a guide that resolves doubts related to the concepts you will find, or in your case, make you capable of gathering the necessary documentation so that the Consultancy of your trust can correctly prepare the Declaration.

 

To do this, we must go step by step, and the first of them is to distinguish if we are under the obligation to file the Income Tax Return. The criteria for knowing if we are obligated or not can be modified every year. You can consult our article on the matter at this link, which also includes a fundamental glossary of terms to understand the meaning of the concepts you will encounter repeatedly. You may not be obligated to file the Return, but if the result is in your favor, you will be interested in filing it.

 

The next step after verifying that we must or want to file the Declaration consists of downloading the “Tax Data” that the Administration makes available to us on its web platform. And what are the Tax Data? It is all the information that the Public Administration has in its possession and makes available to us, which contains personal, family and economic data at a certain date. With these data, the Tax Agency offers a “Draft” of your Return, or what is the same, a proposal for a Return, so that, if you consider it correct, you file it, or if on the contrary you consider it incorrect, you modify it, adding or deleting those parts that are wrong.

 

It is very important to understand this, as the citizen tends to think that if the “Tax Data” are delivered by the Administration, they must be correct. However, it is very normal to find errors for which only you, as a taxpayer, are responsible if you take them as valid, even if these errors have been made by the Administration. And the only objective of the Administration when delivering your “Tax Data” to you is none other than to facilitate as much as possible the task of preparing your Return, all without becoming responsible for the data they put at your disposal.

 

It is at that moment, when reviewing the “Tax Data”, when you must understand all the concepts that appear in them, and thus contrast the data provided by the Administration with the data in your possession. To do this, we indicate the instructions you should follow:

 

1. Review that both the “Identifying Data” and the “Tax Domicile” are correct.
2. Review that the “Earned Income” is correct, for this it is necessary to obtain the certificate(s) of retentions from the paying company.
3. For those self-employed people who carry out an economic activity on their own, it is necessary to request the certificate(s) of retentions for the amounts reflected in the “Economic Activities” section, which are related to the invoices issued to clients throughout the year. You should also check that the expense for “Social Security or Self-Employed Contributions” is correct.
4. Review the “Explicit Yields from Movable Capital”. For this, information from all the bank entities you work with will be necessary, which you can download from their official websites, in the corresponding “Income Tax Return” section. This bank information is also fundamental for reviewing, in case you have any, that the information about “Loans and Credits on Real Estate” is correct.
5. In case of being the owner of any leased property, you will see the section “Real Estate Leasing”. In such a case, it will be necessary to verify if the information about each property is correct, consisting of:
   1. Percentage of ownership of the property (verify through the deed).
   2. Cadastral reference (verify through the IBI receipt or deed).
   3. Use or purpose given to the property, that is, if it involves leased properties, if it is your primary residence, if they are leased to relatives or if, on the contrary, they are not leased.
   4. Type: if it is a house, local, parking/storage room, rustic or plot.
   5. Number of days leased in the fiscal year and income received.
   6. Knowing if, in the cases of house leasing, they were leased for a period longer than a year (see lease agreement).
   7. If you are the owner of any rented local, you must attach the certificate of retentions.
   8. For leased properties, all expenses for the year for each property must be attached, which consist of:
      • • Taxes, surcharges and fees: for example, IBI, garbage fees, etc.
        • Balances of doubtful collection: non-payments by tenants.
        • Other deductible expenses for which an invoice can be provided: insurance, cleaning, maintenance, furniture, invoices not paid by the tenant, community fees, etc…
   1. Finally, the tax identification number, name and surname of each tenant must be indicated.
6. Verify the cadastral reference of all properties owned by you, through the IBI or deed.

 

To conclude, it should be highlighted that depending on the Autonomous Community in which you reside, some tax advantages in the form of reductions and deductions may be applied that can improve the result of the return. If you are looking for both security and an optimal result in the return, the best option is to go to your trusted consultancy.

 

Once the data has been verified and modified, you have done the hardest part! All that would be left is to file the Income Tax Return indicating the current account on which you want the refund to be made or the charge in case the result is to be paid.