As of 2016, personal deductions have been limited. The general limit for 2023 is the lesser of (i) 15% of the yearly overall income of the taxpayer or (ii) an amount equal to five annual UMA (a maximum of MXN 189,222). Retirement accounts and education expenses are not subject to this general limit and have separate limits (see below). Medical expenses will not be subject to this limit provided that the individual has a medical certificate issued by a government health institution.
Contributions made to authorised charities are deductible, limited to 7% of the prior year's taxable income.
Medical, dental, nutritionist, psychologist, and funeral expenses
Resident taxpayers are allowed to deduct un-reimbursed medical, dental, nutritionist, psychologist, and funeral expenses for themselves and their dependants, as well as health insurance premiums subject to the general limit. Such expenses are not deductible if they are paid in cash.
Home mortgage interest
Home mortgage interest (adjusted for inflation) is deductible, subject to the general limit and a cap on the loan value.
Contributions to certain special private retirement accounts and voluntary contributions to the retirement accounts of the Mexican social security system are deductible (limited to certain amounts). Withdrawals from these plans become taxable income.
Taxpayers are allowed to deduct tuition expenses paid for their spouse, children, parents, and themselves. The maximum amount deductible per student varies from MXN 12,900 to MXN 24,500 per year, depending on the level of education. The limits are adjusted annually for inflation. The cost of university-level education is not deductible.
There are no standard deductions in Mexico.
Business owners and independent professionals are allowed to deduct most of the same business expenses as corporations (see Deductions in the Corporate tax summary for more information).
A net loss from professional and business activities is not currently deductible against other income, but the tax loss may be carried forward for ten years against professional and business income only.
Capital losses may be used to partially or completely offset capital gains and, in some cases, other investment income but not against compensation, business, or professional income.
Rental losses can be deducted against other investment income in the same year. However, any excess loss cannot be carried forward.