How to declare additional income on your income tax return? Find out and avoid making mistakes!

Many people look for ways to supplement their income through informal activities, such as sales, services, crafts, among others. 

But should these earnings be declared on income tax? And how can this be done correctly? 

Who needs to declare informal extra income?

According to the rules of Federal Revenue, you need to declare IR if you had income from work above R$ 28,559.70 in the year, or if you received exempt, non-taxable or exclusively source-taxed income in the previous year, above R$ 40 thousand or obtained any capital gain from the sale of goods. 

Therefore, if you meet any of these criteria, you must report income from informal work in your tax return, even if you do not have the payer's CPF. 

Otherwise, you may end up in a fine mesh and have to pay fines and interest. 

• Extra income through your cell phone: 3 ideas to make money with technology!

What is fine mesh? 

When you submit your Income Tax return, it is automatically analyzed by the Federal Revenue Service procedures.

In this sense, the information you declare is compared with information made available by other institutions.

But, going through this situation doesn't mean that something is wrong, but rather that there may be a few more things to declare.

This way, if there is any inconsistency in the information, your statement will undergo an even more rigorous analysis, called “fine mesh”.

Therefore, while your declaration is in the fine mesh, you will not receive the refund.

How to collect tax monthly?

Initially, the best way to collect the tax monthly is through the carnê-leão (Leave-In Tax).

The carnê-leão is a Federal Revenue system that adds up the tax to be paid, considering the gradual table made each month.

This way, the person will not have to make the payment all at once when filing their annual income tax return.

Therefore, if the person chooses to use the carnê-leão, simply access the Federal Revenue website and start the launch process immediately.

After that, you need to issue the Federal Revenue Collection Document.

Now just make the payment by the last business day of the month following the month of collection.

In 2021, people exempt from paying income tax through the carnê-leão were those who had income below R$ 1,903.98.

Therefore, if you have not yet paid your income tax monthly, you will need to do so in your annual declaration.

However, it is worth remembering that you will be subject to charges and interest arising from the situation.

But, if you anticipate the situation and organize yourself to stay up to date with your income tax, you certainly won't have any headaches regarding this matter.

How to declare extra income on IR?

When making the declaration of Income Tax, you must import the data from Carnê-Leão into the declaration generator program (PGD), which is available on the Federal Revenue website. 

If you did not use the Carnê-Leão, you must report your income manually in the “Taxable Income Received from Individuals and Abroad by the Holder” form, in the “Non-salaried work” column.

If you received income from individuals, you do not need to provide the payer's CPF, unless:

• Doctor;
• Dentist;
• Speech therapist;
• Physiotherapist;
• Occupational therapist;
• Attorney;
• psychologist or psychoanalyst. 

In this case, you must include the CPF of the payment holders in each of the services.

How to declare assets and rights acquired with informal extra income?

In addition to your income, you must also declare the assets and rights you acquired through informal work, such as vehicles, real estate, savings, etc. 

This information must be filled in on the “Assets and Rights” form of the declaration program. 

Don't forget to inform the source of the funds used to purchase the goods and keep the receipts for at least five years. 

• Do self-employed individuals need to file an income tax return? What does the law say?

What are the advantages of declaring informal extra income?

Declare informal extra income in IR It is a way to avoid problems with the tax authorities and to regularize your tax situation. 

Additionally, declaring your income can help you prove your income when obtaining credit, financing, social benefits, and more. 

Therefore, be sure to fulfill this obligation and consult a qualified professional if you have any questions.

Conclusion

Although many people think they only need to declare fixed, formal income, this isn't true. Additional income from formal or informal sources must also be declared.

Therefore, be careful and declare your extra income to avoid problems with the IRS.