Do you have to make the 2017 Income Statement as a self-employed person and you don't know where to start? The different sections can be confusing, but we help you with this step-by-step guide so that you can complete and send your return without problem.
Income Statement 2017 for the self-employed: initial considerations
If you are self-employed, the 2017 Income Statement can turn into a nightmare. There are many sections to fill out and many questions about the concepts of VAT and personal income tax , business activities, etc.
Luckily, in the Tax Agency system you can create and save drafts, make modifications and consult doubts before sending the final declaration.
Our advice, therefore, is that you start the procedure as soon as possible . Completing your return without rushing will prevent you from making unnecessary stress-related mistakes. Also, if the final result is "to be returned", you will receive your money faster. In this way, the Treasury rewards those who make the Income Declaration in the first days.
Prepare everything before starting: what do you need for your self-employed income tax return?
Remember that to make the 2017 Income Declaration you need a method of access to the Electronic Office of the Tax Agenda . You must have an electronic DNI, a digital certificate or a password from the PIN key system.
The PIN code is a very convenient and direct access method, since you can obtain a password at any time from the mobile app .
Also keep in mind the great novelty of this year: taxpayers will be able to present the 2017 Income Statement through an application. However, if you are self-employed and have many bills to manage, we advise you to sit in front of the computer to make the statement more comfortably.
If you have minor children or are married, you will probably have to file a joint Income Tax Return, or an individual and a joint one . It is very important that you inform yourself in advance about your situation by asking a manager or solving your doubts at the Tax office.
Finally, remember to have at hand all your tax returns for the year 2017 (VAT, personal income tax and others) , your account books or lists of invoices with expenses and income, and other important documents that you have to declare: rental contracts, documents for the sale of cars and other property assets, etc.
Once you have everything ready, and with the information from box 440 of your 2016 Income Statement, you can enter the Income Web page, identify yourself and start the return.
1. Review the data of payers, but do not transfer them
In an initial moment, the system will show you the information of all your payers . For example: if you have issued invoices to companies, those companies will have declared your payments and they will have to appear here.
If there are any of these payments that correspond to a period of work as an employee (not as a self-employed person!) , Move those boxes to the work section.
For the rest of the fields, corresponding to payments received from companies and that you have collected through invoices as a freelancer, select the option "do not transfer" .
This step is very important, because your income from freelance invoices must be declared in their own sections, with their specific accounting. You will only have to transfer those charges that do not correspond to freelance work .
2. Enter or correct your personal and family data
Check your personal data and your NIF , as well as the Autonomous Community in which you have carried out your freelance professional activity. In this first section you will also have to indicate your minor children, your children up to 25 years of age who are still under your authority, and descendants or ascendants with disabilities or at your expense.
This is the section where you must also indicate if you are going to make the individual declaration, the joint declaration or both.
Next, the system will ask you for the information corresponding to your habitual residence , as well as the corresponding cadastral reference. Check that the data is correct. If there has been a change in your tax address, also indicate it in this section.
Lastly, it indicates the complete list of children and other descendants of those under 25 years of age or with disabilities who live in the same family unit.
3. Tax allocations and representative
In the following steps you will be able to indicate if your tax assignment and the representative's data. Indicate if you want to contribute to the Catholic Church, other organizations, or both.
If you make the sole declaration, you do not need to fill in the representative's information . Consult your manager for this information if you have to declare the income of other dependents.
Finally, use box 107 if you are making a complementary Income Statement .
4. Income from labor and movable capital
In the “Earnings from work” section, the income that you have received under a labor contract as a non-self-employed worker must appear. If you moved them correctly at the beginning of the Declaration, this section will fill in itself.
For its part, the "Income from movable capital" is usually automatically updated to include, among others, the interest you have received in your bank accounts . You may need to update this information to include, for example, profits from stock trading and other transactions.
5. Real estate
If this is your case, in this section you will have to complete the data corresponding to flats and other real estate that you own, not including your habitual residence .
You will have a section for real estate not affected by economic activities and another for those that you use in economic activities or business rental.
6. Direct estimation for freelancers
If you are not part of a special group (such as agricultural and livestock activities), this is the most important section for you. In fact, most of the economic activities of the self-employed fall into this category.
If you carry out more than one IAE economic activity , it is very important that you first fill in the complete information for a single category and then register the next activity.
Below we review all the information you will need in this section, to declare all your income and expenses without forgetting anything.
Type of activity carried out, indicative code and group or IAE heading
To find out which code corresponds to your economic activity, look for the information related to the IAE in your self-employment registration papers . You will find what you need in the professional category sections.
Also choose the modality (normal or simplified estimation) and indicate if the collection and payment criteria applies to you. Make sure that the "Declarant" box remains marked : you are indicating that the professional activity is yours and not that of other family members that you have included in your declaration.
Indicates the income from that economic activity
In the section of your operating income, you must write down the total amount that you have received in all of 2017 for that economic activity, without VAT or personal income tax . So that we understand each other: the invoices that you have issued and charged for your services.
The following sections serve to indicate your earnings from imports or others .
How is the personal income tax that you have withheld from your invoices declared?
When you click on the edit button in the income section, a pop-up window will open to indicate the income data by categories.
Below you will find two sections for your Withholdings : one specific for the lease of urban real estate for economic activity, and another for all the rest of the personal income tax that you have been withheld throughout the year for your economic activity.
Later in the Declaration, you will find a section dedicated to withholdings and payments on account:
- Box 0560 will include the sum of all withholdings for urban leases .
- Box 0561 will include income tax for your economic activity (except urban leases).
- In box 0566 you must indicate the personal income tax payments that you have already made to the Treasury in 2017 , for monthly or quarterly declarations (for example, form 130).
- The rest of the boxes will include the personal income tax already withheld for other issues, such as movable capital.
Tax deductible expenses in the 2017 Income Declaration for self-employed
The deductible expenses of your economic activity will be filled by adding all the amounts corresponding to the year 2017, without VAT. But you will have to divide them by categories:
- Exploitation consumption . It refers to the material you need for your activity, such as a computer, a printer, fuels for the machinery, raw and auxiliary materials ...
- Social Security paid by the company : it is the sum of all the payments you have made to Social Security in 2017, including your self-employment quotas and all the Social Security payments of your employees.
- Wages and salaries : expenses for remuneration, allowances, travel or extraordinary payments to your employees.
- Other personnel expenses : investments such as training courses, gifts for your workers, accident insurance, etc.
- Repairs and conservation . This section includes the expenses to maintain your facilities and your material.
- Independent professional services . Here you can include the payments you have made to economists, independent businessmen, lawyers, notaries ...
- Other outside services . This broad sector includes spending on transportation, research and development, advertising, office supplies (water, telephony, Internet, electricity, etc.) and banking services.
- Input VAT . This category only applies to expenses that cannot be deducted or managed with the quarterly VAT returns (model 303).
- Leases and royalties .
- Tax deductible taxes . This includes, for example, the IBI corresponding to a property where you carry out your activity.
- Financial expenses .
- Amortizations .
- Losses due to bad debts .
- Incentives for patronage .
- Other tax deductible services .
How to register another economic activity?
When you have completed all the income and expense boxes, the system will automatically calculate the net return for the activity. Only then can you add another or other economic activities .
When you have filled in the details of your main activity, go back to the top and press the "High Activity" button .
Remember that each activity is declared separately , with its expenses and income. And if you have put your freelance fees in the main activity, you should not include them again in the second activity.
7. Income from economic activities in objective estimation and other economic activities
In the following sections you will be able to fill in the information on the economic activities you carry out in objective estimation or in special regimes such as agriculture and fishing.
In each case you will have to carry out a similar process : indicate the economic activity, record the income and expenses and let the system calculate the returns.
8. Capital gains and losses
The following sections of the 2017 Income Statement are dedicated to the benefits and expenses related to non-economic activities. For example: if you have earned money by selling a car or renting a flat that you own, or if you have won a prize or contest.
We recommend once again that you consult a manager if you have doubts about the declarations of capital gains, especially if you have made investments in companies and do not know what taxes are applied.
9. Automatic calculations of income and deductions
The Renta Web system automatically calculates the sections of the following sections , related to the minimum bases, the minimum income values and the minimum contribution values according to your family and work situation.
Check that the system has filled out these sections and then proceed to the Deductions sections. Let the system automatically fill in this information and go directly to the "Reductions" sections .
10. Reductions in Income Declaration 2017
The 2017 Income Statement includes many different options for you to obtain reductions. You can declare your donations, union dues , aid to NGOs, special situations (maternity, adoption of children ...) and benefit from special aid from your Autonomous Community, such as rental aid.
11. Additional data
If you pay fees for food to your children by court decision, or if you must declare any exempt income , you can do it in these sections.
11. Tax calculation and declaration result
Starting on page 51 you will find a summary of all the data entered, with your income from work and from your economic activity as a self-employed person. The reductions will also be included and the Renta Web system will calculate the tax that corresponds to you.
Although the entire calculation process is automated , it is advisable to do a quick review to make sure there are no errors.
At the end of the statement you will also find several more sections for deductions (rent of habitual residence, regional deductions, etc.).
12. Latest data and shipping
When you have finished in the system, you can use the "Validate" button from the top menu . Renta Web will review the fields that may contain errors and will show notices of important information so that you can correct what is necessary.
Also check that you have completed the reduction section (boxes 0558 to 0569) so that the fractional payments of personal income tax that you have made previously are taken into account .
You already have it! If the result is "to be returned", check that the IBAN of your bank account is correct . If you have to deposit money to the Treasury, select the payment method you prefer.
Finally, before sending, use the button "Summary of statements" and thus check the figures for each section. When everything is ready, select "File a return" in the upper right corner.