What are personal deductions?
Personal deductions are expenditures made by individuals for the protection of themselves and their immediate family members, regardless of income source. These deductions reduce the taxable base for Impuesto sobre la Renta (ISR — Mexico's federal income tax) when filing your annual tax return with the SAT (Mexico's Tax Administration Service).
The 8 personal deductions
1. Medical, dental, and hospital expenses
You may deduct qualifying medical expenses incurred for yourself, your spouse or domestic partner, your children, and your parents. Key conditions:
- Payment must be made by check, electronic bank transfer, or credit/debit card
- Prescription eyeglasses are subject to a maximum cap of $2,500 MXN
- Cash payments are not accepted
2. Funeral expenses
Funeral costs for your spouse or domestic partner, as well as direct relatives (ascendants and descendants), are deductible, provided the deceased did not earn income above the threshold established by law.
3. Charitable donations
Donations to SAT-authorized institutions are deductible up to 7% of the cumulative income that served as the tax base for the prior fiscal year.
4. Real interest paid on mortgage loans
Real interest actually paid on mortgage loans used to finance your primary residence is deductible. You will need the interest statement (constancia de intereses) issued by the financial institution.
5. Voluntary retirement contributions
Voluntary contributions to your individual retirement account (cuenta de retiro) are deductible up to 10% of your cumulative income, not to exceed the equivalent of five annual minimum wages.
6. Major medical insurance premiums
Premiums paid for major medical (gastos médicos mayores) and complementary health insurance policies are deductible for both the taxpayer and their economic dependents.
7. Mandatory school transportation
School transportation costs are deductible when the service is mandatory or is bundled into tuition fees charged uniformly to all students.
8. Local payroll tax payments
Payments of local (state-level) income taxes on wages are deductible, provided the applicable tax rate does not exceed 5%.
Tax incentive for school tuition (colegiaturas)
In addition to personal deductions, a separate tax incentive applies to tuition payments (colegiaturas). The following annual caps apply by education level:
| Education level | Annual cap |
|---|---|
| Preschool (Preescolar) | $14,200 MXN |
| Primary school (Primaria) | $12,900 MXN |
| Middle school (Secundaria) | $19,900 MXN |
| Vocational/technical (Profesional técnico) | $17,100 MXN |
| High school (Bachillerato) | $24,500 MXN |
Overall deduction limit
The total amount of personal deductions cannot exceed whichever of the following is lower:
- Five annual minimum wages annualized
- 15% of the taxpayer's total income
It is essential to retain all valid tax receipts (CFDI — Comprobante Fiscal Digital por Internet) supporting each deduction in order to apply them correctly on your annual return.
Need expert guidance?
At SOLPROAM we help you identify and make the most of every personal deduction you are entitled to. Contact us to optimize your annual tax return.