2025 Income Tax Return: A Quick Guide to Avoiding Mistakes, Penalties, and Stress

The start of the calendar for filing personal income tax returns for the 2024 tax year is approaching. According to the DIAN (National Tax Agency), the deadlines for filing personal income tax returns will begin on August 12 and extend through October 24, 2025, based on the last two digits of the tax identification number (TIN).

But beyond a simple formality, this process represents an opportunity to review one's personal financial status, optimize one's tax burden, and avoid potentially costly penalties. This not only helps organize one's finances but also opens the way for thinking about new financial paths for the future.

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Siigo, a company specializing in accounting software, and Credicorp Capital, a financial services firm, agree that advance preparation and proper planning make the difference. From their perspective, each firm provided a practical guide with the essentials you should consider to file your tax return on time and make smart decisions.

Who should declare?

According to Siigo, all individuals who, during 2024, have met at least one of the following conditions must file an income tax return:

* Have a gross net worth equal to or greater than $211,792,500 at the end of the year.

* Record gross income equal to or greater than $65,891,000 for the entire year.

* Make credit card purchases equal to or greater than the same amount.

* Have bank deposits, investments or purchases equal to or greater than $65,891,000.

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* Be responsible for Sales Tax (VAT).

"Meeting even one of these conditions triggers the obligation to file a tax return, so it's important to carefully review bank statements, employment income, and other financial transactions," they explained.

To file your income tax return, it's essential to have an updated tax ID (RUT), an active electronic signature, and several key documents that support your financial information. These include income and withholding certificates, bank statements, investment or pension fund certificates, and electronic invoices associated with deductible payments permitted by law.

"It's also important to include information from digital wallets like Nequi and Daviplata, as the DIAN reviews them as part of the data cross-referencing process. It's best to prepare all this documentation in advance and, if necessary, seek the advice of an accountant to avoid errors or omissions that could result in financial penalties or legal complications," Siigo added.

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What happens if you don't file on time?

The consequences of not filing or filing late are severe , as according to tax regulations, the penalty can be 5% of the monthly tax due for each month of delay, and in cases of evasion or non-filing, fines can reach up to 20% of unreported income or bank deposits.

In addition to the financial impact, an improperly filed tax return can raise red flags for future audits. Therefore, according to Credicorp Capital, filing an income tax return is also a tool for optimizing personal assets, provided you are aware of the available tax benefits.

"Among the most efficient options are voluntary pension funds, which allow for a reduction in the taxable base at the time of contribution and offer tax benefits if the withdrawal meets legal requirements," they emphasized.

Another alternative is Collective Investment Funds (CIFs) and managed portfolios, which allow you to organize your income and adjust your asset portfolio to minimize your tax liability, provided you have the appropriate advice.

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“It is also possible to obtain profits by investing in the Colombian Stock Exchange (BVC). Profits from the sale of shares may be tax-exempt if they do not exceed 3% of the company's total outstanding shares. This applies to both local and foreign stocks traded through the Colombian Global Market, including companies like Apple, Tesla, and Nvidia, and some ETFs,” these analysts stated.

Both Credicorp Capital and Siigo insist that the income tax return should be understood as part of a personal financial strategy, so they concluded that beyond compliance, it is an opportunity to review the financial status, identify savings and investment opportunities, and build a more efficient tax plan for the future. DANIEL HERNÁNDEZ NARANJO

Portfolio Journalist