The income statement can become a steep road for the self-employed. You have to put order in the sea of invoices, services and different payments that have been made throughout the year to get the most out of it and reduce the tax bill.
"Proper business planning and the correct deduction of all expenses corresponding to the activity can have an economic impact of up to 4,000 euros in savings," says Marta Zaragozá, CEO of Declarando, specialized tax advice for the self-employed. What are the most common expenses that can be deducted?
The self-employed who work in their habitual residence can deduct 30% of the costs of supplies -those that are related to their activity-, although with some conditions: they can be deducted on the percentage of the house in which the proportional activity is carried out and, in addition, it has to appear like this in the documentation of the self-employed person. Thus, 30% of the tax relief would be applied to that proportion.
"A doctor who allocates 40 meters of his house -with a surface area of 100 square meters- to his professional activity, will have 40% affection for the activity. I apply 30% over 40% affection and I get an application result on the amount of the expenses of 12% of the total. If there are 5,000 euros of expenses in supplies, 600 euros could be deducted ", exemplifies Arturo Javier Jiménez Contento, director of the Study Office of the Spanish Association of Tax Advisors (Aedaf).
The self-employed pay a monthly contribution to Social Security. It is fully deductible in its annual computation. "Likewise, self-employed workers who are in charge of employees, may deduct the amount of their payroll and the amounts paid to Social Security," it is stated from Declarando.
The line or lines associated with the business can be fully deducted. "For this, it is important that the self-employed can justify that the telephone is used exclusively for their business, without interfering in matters of their private life. For this reason, they must have another mobile line in their name," they advise from Declarando.
These types of support and counseling services can be fully deducted.
Those who have contracted online work tools or subscriptions to computer programs, can deduct the amount paid for it, as they are necessary for the development of their activity. You can also deduct the management of professional websites, the subscription to specialized magazines and the purchase of books related to the profession.
The services contracted to advertise the business or justifiable expenses such as marketing actions can be fully deducted.
If the self-employed person rents a place or office to carry out the activity, or pays for coworking, 100% can be deducted. The same happens with the material necessary to develop your profession.
Liability, medical and life insurance are also deductible. Specifically, civil liability insurance policies, private medical insurance or life insurance may be deducted up to 500 euros per year without the need to justify the relationship of the insurance with the professional activity.
In the case of civil liability and life insurance, the deduction has no limit, but the latter must be linked to a mortgage or be a savings life insurance.
If a self-employed person is registered for their activity or belongs to a professional association and regularly pays a fee for it, they can deduct it in full.
Transportation and travel expenses that are necessary to carry out the activity, such as public transport or a taxi ride, can be fully deducted. "In this case, it will be necessary for the self-employed person to be able to justify the relationship of the trip with his business before a possible query from the Tax Agency," warns Zaragozá, so it will be necessary to have invoices in the case of the taxi, for example.
"Training activities on aspects that affect the business of the self-employed are also deductible expenses," says the expert.
In general terms, a self-employed person can deduct travel expenses for work and accommodation paid by card, with an invoice for the expense and with a daily maximum of 26.67 euros in Spain and 48.08 on trips abroad without an overnight stay. With overnight stay the amounts are higher.
Vehicle expenses can be deducted by those who carry out activities related to the transport of goods or people.
