The 'secret' deductions to get your money back

Every year, millions of Mexicans donate money to the SAT because they don't know all the personal deductions they're entitled to. We reveal the catalog of expenses you can deduct beyond medical expenses and tuition, and how to do it correctly to get a positive balance.

The annual tax return is viewed by many as a complex and often punitive obligation. However, this perception hides a powerful reality: it's one of the best opportunities of the year to recover money. The Tax Administration Service ( SAT ) allows individuals to deduct a series of personal expenses that reduce the base on which Income Tax (ISR) is calculated, which can result in a credit balance, i.e., a refund to your bank account.

The problem is that most taxpayers are unaware of the scope of these deductions. They limit themselves to the most obvious, such as medical fees and tuition, leaving thousands of pesos on the table that they could legitimately recover. According to experts, personal deductions are a "powerful tool, but one that is largely underutilized in Mexico."

The law allows for a variety of expenses that you can deduct from your income, many of which are surprisingly common. It's essential to understand them to maximize your refund.

Expanded Health :

In addition to consultations, there are a range of health services and products that are deductible:

• * Prescription Optical Lenses: You can deduct the purchase of lenses up to $2,500 pesos per year. The requirement is to have an invoice specifying that they are prescription lenses.
• Psychology and Nutrition: Fees for licensed psychologists and nutritionists are fully tax-deductible.
• Rehabilitation Devices and Prosthetics: The purchase or rental of rehabilitation devices, as well as the acquisition of prosthetics, are deductible. This includes everything from a wheelchair to orthopedic implants.
• Laboratory Tests and Clinical Studies: Any type of laboratory test or clinical analysis ordered by a doctor is deductible.

Family Expenses and Education :

• Funeral Expenses: An expense no one wants to incur, but one that is deductible. You can deduct the funeral expenses of your spouse, parents, grandparents, children, and grandchildren. The limit is the value of one Unit of Measurement and Update (UMA) per year.
• School Transportation (Mandatory): If your children's school requires payment for school transportation, this expense is deductible. It must be billed separately or clearly included in the tuition.

Housing and Savings for the Future :

* Actual Mortgage Loan Interest: The actual interest (the portion of your payment that exceeds inflation) on your mortgage loan (Infonavit, Fovissste, or bank) is deductible. Your financial institution must provide you with an annual statement.

* Complementary Retirement Contributions: The voluntary contributions you make to your Afore sub-account or to a Personal Retirement Plan (PPR) are deductible and have their own limit, independent of the general limit.

"Personal deductions are a powerful tool, but they're underutilized in Mexico. Many taxpayers don't know they can recover thousands of pesos each year." – iCopyme Consulting.

Knowing the deductions is only half the battle. For the SAT to validate them, you must follow three golden rules. The most common mistake isn't not knowing what the expense is, but making a mistake in the procedure.

1. Pay with Electronic Means: This is the most important rule! Any expense you want to deduct must be paid by credit card, debit card, electronic transfer, or personal check. Cash payments are NOT deductible.

2. Request an Invoice (CFDI) with the Correct Use: You should always request an invoice for your expenses. Make sure your RFC (Tax Identification Number) is correct and that the "CFDI Use" field corresponds to the type of deduction. If the use is "General Expenses," the SAT may reject the deduction.

3. Know the Global Limit: The total amount of personal deductions (except for some such as retirement contributions and disability expenses) cannot exceed five annual UMAs (approximately $206,367 pesos for the 2025 return) or 15% of your total annual income, whichever is less.

Planning your expenses throughout the year, always requesting an invoice, and paying by card are the three pillars to maximizing your balance and stopping giving your money away to the SAT.