Every April in Mexico, millions of individuals file their annual income tax return with SAT. A significant portion of those returns are submitted without personal deductions, or with incomplete ones. The money that gets left behind has nothing to do with a lack of eligible expenses — most people have medical bills, health insurance, and in many cases a mortgage. The problem is elsewhere: not saving the right receipts, not knowing there is a global annual cap that limits what you can deduct in total, or not understanding the difference between personal deductions and business deductions.
This guide focuses on personal deductions under Article 151 of the LISR (Income Tax Law), which are exclusive to individuals and only apply in the annual declaration. They are distinct from business deductible expenses, which follow different rules. A self-employed professional, for example, can have both: expenses from their business activity and personal deductions such as medical bills and health insurance on top of that.
Your total personal deductions cannot exceed the lower of 15% of your total annual income or 5 annual UMAs (approximately $206,000 MXN in 2026). This cap applies to the sum of most personal deductions. If you do not know it exists, you may believe you have far more deductible room than you actually do.
Who can use personal deductions?
Any individual who files an annual ISR return with SAT. That includes employees earning over $400,000 per year (or those who had more than one employer during the year), self-employed professionals, rental income earners, business owners under PFAE regime, and retirees with taxable income. In all these cases, personal deductions reduce the base on which ISR is calculated and can generate or increase a refund in the annual declaration.
What does not apply: RESICO (Simplified Trust Regime). Taxpayers in RESICO cannot apply personal deductions in the same way, because their ISR is calculated on gross income at a flat rate. Personal deductions also do not apply to monthly provisional payments in any regime — only in the annual declaration.
The annual cap: how the real limit works
Article 151 of the LISR establishes that the total amount of personal deductions cannot exceed the lower of two caps:
| Cap | 2026 Calculation |
|---|---|
| 15% of total annual income | If you earn $500,000/year → cap = $75,000 MXN |
| 5 annual UMAs | 5 × $113.14 × 365 = ~$206,480 MXN |
The lower one applies. For most people earning up to about $1.3 million per year, the relevant limit is the 15% of income, not the 5-UMA ceiling. Someone earning $400,000 annually has a real cap of only $60,000 MXN in personal deductions — regardless of how much they spent on doctors and insurance.
Two important exceptions that fall outside this general cap:
- Real mortgage interest (Art. 151 fraction IV) is not subject to the 15%/5-UMA cap.
- Contributions to personal retirement savings plans and special savings accounts (Art. 185 LISR) have their own separate limit: 10% of taxable income, up to a maximum of 5 annual UMAs.
Each personal deduction in detail
1. Medical, dental and hospital fees
The most used deduction and also the one with the most errors. It covers payments to allopathic physicians, dentists, psychologists, nutritionists, optometrists, speech therapists, physical therapists, nurses and hospitals. It also includes fees paid to foreign doctors who have a permanent establishment in Mexico.
What is not on this list but many people try to deduct: prescription medications bought at a pharmacy. Pharmacy drugs are not deductible as a personal deduction — unless they are included in a hospital's invoice (not a standalone pharmacy). The antibiotics, painkillers, and prescribed supplements — none of them qualify regardless of having a prescription. It is one of the most common misconceptions.
Prescription eyeglasses and orthopedic devices do qualify, provided there is a CFDI from an authorized provider and, in most cases, a medical prescription supporting the need. Dental prosthetics, hearing aids, and wheelchairs are also deductible.
2. Health insurance premiums (GMM)
Premiums paid for individual or family major medical insurance (gastos médicos mayores) are deductible for the taxpayer, their spouse or common-law partner, parents, grandparents, children and grandchildren — as long as those family members are not themselves ISR taxpayers. The insurance company automatically issues the corresponding CFDI, usually at year end or with each premium payment.
One point that surprises people: if your employer pays a group insurance policy and deducts it from your payroll, you cannot deduct it again in your annual return, because the employer already applies it as a business deduction. It is only deductible for you if you pay it directly with your RFC as the policyholder.
3. Funeral expenses
Deductible for the taxpayer, their spouse or common-law partner, parents, grandparents, children and grandchildren. The limit is 1 annual UMA (~$41,296 MXN in 2026) per deceased person, independent of the general 15%/5-UMA cap. In practice, basic funeral service costs in most Mexican cities are within this range, though in larger cities it can get close.
4. Donations to authorized organizations
Deductible up to 7% of the taxable income from the previous year. The recipient organization must appear on SAT's current list of authorized donees (donatarias autorizadas). A frequent mistake: donating to a civil association that has a RFC and issues CFDIs but is not formally authorized by SAT as a donee. Regular RFC status is not the same as being an authorized donee.
Donations to political parties are not deductible for individuals.
5. Real mortgage interest
Only applies to loans for your primary residence, not for rental properties. The detail that surprises many people: you do not deduct the nominal interest you pay the bank — you deduct the real interest, which is the nominal rate minus inflation. In high-inflation years like Mexico has experienced since 2021, the real interest can be very small or even close to zero, making this deduction nearly irrelevant for many people.
Your bank or INFONAVIT is legally required to provide you with an annual certificate stating the deductible real interest amount. That document is what you enter in your return — you cannot calculate it yourself.
6. Voluntary AFORE contributions and personal retirement plans
Voluntary contributions to your AFORE account or a certified personal retirement plan (PPR) are deductible under Article 151 fraction V and Article 185 of the LISR. The limit is 10% of your annual taxable income, with a maximum of 5 annual UMAs (~$206,480 MXN).
This deduction is not subject to the general 15%/5-UMA cap of Art. 151 — it is calculated separately. Practically speaking: if you have already maxed out the 15% cap with medical expenses and insurance, you can still deduct retirement contributions on top of that. It is arguably the most flexible personal deduction in this respect.
One operational point: to get the CFDI from your AFORE for voluntary contributions, you have to request it explicitly. Many people make contributions throughout the year and arrive at annual declaration time without the tax receipt because they never asked for it.
7. School transportation
Only deductible when the school makes it mandatory — meaning all students must use it with no option to arrange their own transport. The CFDI must be issued either by the school (as part of its services) or by the transport provider directly. If transportation is optional, it is not deductible regardless of whether you pay for it.
In practice, very few schools formally establish mandatory transportation in their rules. Worth confirming before assuming it qualifies.
What is definitely not a personal deduction
For clarity, here are expenses that frequently appear in returns with errors because taxpayers — and sometimes their accountants — include them without verification:
- Prescription medications purchased at a pharmacy outside a hospital
- Gym memberships, spa services, nutrition clinics without a supporting medical diagnosis
- School tuition (colegiaturas) — these were deductible until 2022 under a presidential decree that was not renewed for 2023 onward
- Veterinary expenses for pets
- Credit card interest
- Residential rent payments — Mexico does not have a personal deduction for rent paid
School tuition deserves specific mention because it still causes confusion. A presidential decree allowed tuition deductions from 2011 to 2022, with limits by education level. That decree expired and was not renewed for fiscal year 2023 or subsequent years. If a tool or advisor suggests including tuition for 2024 or 2025 declarations, the information is outdated.
The non-negotiable requirement: CFDI 4.0
Every personal deduction requires a valid CFDI 4.0 with your correct RFC, your name exactly as it appears in the SAT registry, and your tax address postal code. A paper receipt, a credit card voucher, a bank transfer record, or a simplified ticket does not serve as a valid deduction record.
Since CFDI version 4.0 became mandatory in 2022, the issuer must include the recipient's RFC and legal name. An error in either field can void the document for deduction purposes. If your doctor issued the CFDI with the wrong RFC, you need to request cancellation and reissuance before filing your return.
If you paid a doctor, hospital or insurer by card, the charge on your bank statement is not your CFDI. You must explicitly request the invoice from the service provider. Many patients pay, the doctor issues the invoice to "the general public" (without a specific RFC) because no one asked, and that expense is lost at declaration time. The fix: always request the CFDI with your RFC at the moment of payment, not weeks later.
How to apply them in the annual declaration
SAT pre-fills your annual return with CFDI data it already has registered under your name. In the SAT portal, when you open your annual declaration, there is a personal deductions section showing a summary of what SAT identified automatically — this typically includes insurance premiums, mortgage interest certificates and AFORE contributions if financial institutions reported correctly.
However, not everything pre-fills correctly. Medical fees in particular often do not appear if the doctor did not issue the CFDI properly or there were version errors. Even if SAT pre-filled your return, verify manually and add any missing receipts.
To add a CFDI manually: in the personal deductions section, you can enter the UUID (fiscal folio) of each document. The system validates that it exists and is registered under your name.
The tax refund generated by personal deductions is requested automatically when you select "yes" to the refund option when submitting your declaration. If you have a balance in your favor, SAT has up to 40 business days to deposit it to your registered account. You will need your valid e.firma for declarations above certain thresholds.
What to do during the year, not just in April
The biggest challenge with personal deductions is not the annual filing itself — it is losing expenses throughout the year from poor organization. A few practical habits that make a real difference:
Create a dedicated digital folder for health and insurance CFDIs. Every time you see a doctor, request the CFDI before leaving and store it there. Same with each insurance premium receipt. When you open your declaration in late March, everything is ready instead of searching through eleven months of emails.
Verify that your regular doctor has an active RFC and issues CFDI 4.0 invoices. Many private specialists do not issue invoices or have suspended their SAT activity. If that is your situation, consider switching to one who does — the tax savings can justify it.
If you have a mortgage, confirm in January or February that your bank has already uploaded the real interest certificate to your portal. Some institutions are slow and the certificate arrives in March, which can cause you to file before having that number.
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Free consultation →Common questions
I paid the doctor in cash. Can I still get a CFDI?
Yes. The payment method does not determine whether an expense is deductible — the CFDI does. You can pay in cash and request the invoice. The doctor is legally required to issue it if you ask. The CFDI will show cash as the payment method (code 01), which is perfectly valid for the deduction.
My partner has no income of their own. Can I deduct their medical expenses?
Yes, provided they are your spouse or common-law partner and are not themselves an ISR taxpayer. Medical expenses for direct economic dependents — spouse, children, parents, grandparents — are deductible in your own return, with the CFDI issued to your name and RFC.
Are medical expenses abroad deductible?
They can be if the foreign doctor or medical institution has a permanent establishment in Mexico, which is rarely the case. Medical services received in another country while you lived or traveled abroad generally do not qualify because the provider is not registered with SAT. When in doubt about a specific case, it is better to verify before including it.
Can I recover years of deductions I did not apply?
Not in a new return for the current year. Personal deductions apply in the fiscal year the expense occurred. What is possible is filing an amended return (declaración complementaria) for the corresponding year if it is still within the legal window (5 years), provided the CFDIs from those years are still valid and were not cancelled.
To understand how your taxes are calculated and how much deductions can reduce them, see our guide on ISR for individuals in 2026. And if you work independently or have business activity, business deductible expenses are a separate topic worth knowing. Learn about our accounting services and available plans for individuals and companies.