Tax Savings: Effective Reduction of Income Tax in Colombia in 2024

In Colombia, there are numerous opportunities to optimize your income tax return as a natural person. If you are a taxpayer, it is essential to know the benefits that DIAN offers to reduce your tax burden and improve your financial situation.

In this article, we will reveal the most effective and up-to-date strategies for the year 2024 that will allow you to reduce your income tax legally and safely. Get ready to discover how you can save significantly on your taxes!

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Take Advantage of Discounts and Deductions

‍DIAN gives you the opportunity to access direct discounts on your income tax. Additionally, you can deduct certain expenses from your taxable base, which will decrease the value on which your tax is calculated.

These expenses include additional payments to the health system, such as prepaid medicine and complementary plans, as well as health policies. Moreover, personal expenses such as your own or dependents' studies, mortgage interest, and donations to non-profit entities can also be deducted.

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Exempt Income and Tax Credits

‍Explore the options of exempt income, which are incomes that are not taxed and can include benefits such as food and housing. Additionally, tax credits are a powerful tool to directly reduce the tax to be paid. These credits are related to educational expenses, dependent care, and other specific expenses that can be subtracted directly from your tax.

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Save for the Long Term

‍Consider contributing to pension funds authorized by law and AFC savings accounts, which are programmed savings accounts for home acquisition, offered by all banking entities. These contributions not only allow you to secure your financial future but also reduce your taxable base, thus decreasing the income tax to be paid.

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1% Deduction for Electronic Purchases

‍Great news for 2024! If you make your purchases in 2023 with an electronic invoice you can deduct 1% of the total value of your purchases. The best part is that these purchases don't need to be directly related to your work. Just make sure to always request an electronic invoice, that the purchases are fully paid at the time of filing the declaration, and that you have used electronic payment methods.

For example, if your annual purchases total $50,000,000, you can deduct $500,000 from your declaration. A significant saving!

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Discount for Non-Taxed Dividends

‍If you have investments and receive non-taxed dividends, in 2024 you can enjoy a 19% discount on this income once it exceeds 1,090 UVT . This is an excellent way to optimize your investments and reduce your tax burden.

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Deduction for Economic Dependents

‍Do you have children, a spouse, or parents who depend on you economically? In 2024, you can deduct up to 72 UVT for each dependent, up to a maximum of four. This means you could deduct up to 288 UVT in total. To maximize this benefit, consult Article 387 of the Tax Statute to know the complete definition of dependents.

Plan and Take Advantage

‍Remember that each benefit has a limit, so it is crucial to be informed and carefully plan your expenses and contributions to maximize savings on your income tax. Don't forget that if you worked less than a year, you should calculate the limits proportionally to the time you were employed.

In summary, in Colombia, there are various legal strategies to reduce your income tax as a natural person in 2024. Take advantage of the discounts, deductions, and tax benefits available to optimize your taxes and ensure a stronger financial future. With smart planning, you can see a significant difference in your tax return!

Don't forget to consult the official DIAN calendar to know the exact dates for your income tax return in 2024. Stay up to date with updates and make the most of these benefits to optimize your finances.

https://www.dian.gov.co/Calendarios/Calendario_Tributario_2024.pdf

Luisa Maria Penha

https://www.linkedin.com/in/luisa-maria-penha-tascon-607b1a1b0/

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