New deductible expenses with tax reform

One of the major changes in the tax reform is the change in income tax deductions for adding new personal expenses

03/12/2025 – 07:10 AM

The tax reform includes a separation of deductions that workers and self-employed professionals can take in income tax, since then Includes new deductible personal expenses, including anticipated drug consumption.

What can be deducted from income tax?

In the field of personal income tax there is Three main concepts influence tax determinationn, subtracting from the tax base, Richard Amaro Gómez lists for Errepar:

• Expenditures necessary to maintain, maintain or obtain a source of taxable profits: such as, for example, the depreciation of fixed assets affected by the development of activity, as well as expenses for the maintenance of income-generating real estate.
• General discounts: These are basically personal costs that the law allows to be deducted (for example, the cost of renting a house, even within certain limits, retirement contributions, interest on mortgages, the salary of a domestic worker, etc.).
• Personal discounts: Which is basically divided into non-taxable minimum, family expenses, and special deduction. They are fixed amounts that are updated year after year and which the law allows to be deducted in accordance with certain requirements.

Outside of these concepts, all other costs incurred by the taxpayer during the year are classified as personal expenses. These are those related to alimony, subsistence, and entertainment for the taxpayer and his family, which In many cases it is part of a concept called quantity consumed.

What does tax reform say about deductible expenses?

Tax reform will broaden the base of deductible expenses, by incorporating more consumption expenses (and thus personal expenses) that can be deducted, As long as there is sufficient supporting documentation, says Amaro Gomez, he specifies:

This means that Expansion of consumption expenses to be deducted These will not be costs generated within the framework of an economic activity, but rather purely personal costs that can be allocated as a general deduction to determine net profit.

In this sense it can be noted that it has long been emphasized that the deduction that should be taken into account when determining the tax is – Treatment expenses for the taxpayer and his family essential. Many countries of the world consider this reduction in profits, so it is expected now, with this reform, that they will be included.

This is just one example, as there are many other situations that can be included as deductible from the tax base, Under the concept of general discount, with or without limit.

How will this action affect the profit calculation?

Regarding the impact on tax determination, there are two possibilities: Amaro Gomez points out:

Taxpayers in the public revenue system: Depreciation expenses (defined as maintenance, maintenance, and entertainment for your primary family group) that are identified as deductible will not be part of the “consumed amount” for the year, reducing the latter.

Taxpayers in the simplified income system: In this case, as there is no financial justification or limitation of the quantity consumed, it is merely the costs stipulated as deductible, within the general deduction category, that influence the tax determination.

Thus, tax reform could bring significant relief to the self-employed and professionals, by making many expenses and consumptions for a person and their family group deductible, such as medicines.