Are you worried when your tax filing due date is fast approaching? Are you unsure of what documents you need to collate in order to file your income tax return? Well, yes we understand that filing your tax return is quite a complicated task. However, when you keep a tab of a few points, you can make your tax filing process easy and hassle-free. So let’s take a look at a few common errors you can avoid when you’re filing your income tax return.
If you’re a hawker, taxi driver, private tutor, or a commission agent, you’ll be indicated as self-employed. So when you’re filing your return, you need to follow the steps below to make sure you’ve declared your trade income the right way.
You’ll need to declare your earnings as business income under section 2 “Trade, Business, Profession or Vocation".
Form B: On Page 2, you’ll need to complete sections from 6 to 9.
Form B1: On Page 2, you’ll have to complete the following sections:
You haven’t received any income to declare
When you get an intimation from the IRAS to file your tax return for a YA (Year of Assessment), you’ll need to submit your tax return even if you have no income for the last year that needs to be declared.
Within 18th April, you should submit your tax return. Once you’ve submitted your income tax return successfully, you’ll be given with an option to acknowledge your tax return.
You’ll need to present your original tax return via the return envelope that is provided to you within 15th April.
Even though your firm has sent the details pertaining to your employment income to IRAS, you’ll still have to file your income tax return. You’ll not submit your tax return, only when you get the NFS (No-Filing Service) Letter.
There isn’t a need for you to raise a claim for CPF relief. If you’re self-employed, CPF relief will be permitted automatically depending on details the CPF Board sends to IRAS.
If you’re self-employed, CPF relief is granted only if you comply with the following conditions:
Being a Singapore tax resident, you’ll need to meet certain eligibility criteria in order to qualify for tax reliefs & rebates. So before you raise a claim, always ensure that you’re compliant with the eligibility criteria.
Do not exit from e-Filing once you’re done with checking your details under the Consolidated Statement. Instead, click on the “Submit” button to complete your tax return filing process. Also, once you’ve submitted your tax return successfully, you’ll be directed to an acknowledgement page.
You need to submit only the documents that have been requested for. You can find the list of documents you need to submit on the Acknowledge Page. You can send in your documents through an email.
Let’s assume you missed mentioning about a specific tax relief claim while submitting your income tax return, you can always re-file your return (once) in less than 14 days from the date on which you submitted your tax return previously or within 18th April, whichever date is earlier.
If you’re the Precedent Partner, you need to file “Form P” based on the income derived out of the partnership. You need to file “Form P” on the partnership’s behalf within the stipulated due date for filing. The filing deadline is 18th April and 15th April for e-Filing and paper filing, respectively.
You’ll need to intimate about the share of income each partner gets out of the partnership. Each of the partners will need to make a declaration for the share of income they have received with the help of their individual tax returns.
The partner who is named initially in the partnership agreement. In case a partnership agreement is not there, the precedent partner will be the partner who is nominated and elected by the rest of the partners involved in the partnership.
Filing Form P is necessary if business was conducted by the partnership in that year and if the partnership has been notified by IRAS to file income tax returns.
Even though your Precedent Partner has filed “Form P” on behalf of the partnership, you still need to file your “Form B” in order to make a declaration for the share you qualify from the partnership income or any other income you derive from additional sources (if any).
Note: Starting from 1st February, you’ll have an option to e-file “Form P”. Suppose a partnership manages to e-file “Form P” within 28th February, the allocation of the partnership will be pre-populated in the “Form B/B1” of the associated partners’. The benefits of having the partnership details pre-populated include:
When you’re considered as “self-employed”, you’re expected to keep a track of all your transactions related to your business accurately. You’ll not be able to file an income tax return with an estimated income, estimated expenses, or incorrect accounts.
You should be declaring your partnership salary/CPF/bonus/benefits like remuneration as “Partnership Income”.
When you e-file your return: Declare your partnership salary as 'partner's salary, bonus & CPF' under section 2 "Trade, Business, Profession or Vocation" > "Partnership".
When you do a paper filing: For “Form B”, on Page 2 you need to fill in item 1b (4). For “Form B1”, on Page 2 you need to complete - Item 1 of Appendix 1 "Trade, Business, Profession or Vocation" and Item 3 "Other Income".
Your Precedent Partner must notify you on the share of partnership income you qualify for and you need to declare this amount via your “Form B” before you file your tax return. You should not proceed to file your tax without declaring your partnership income in Form B. On the other hand, if you are unaware of your partnership income, you should not instead declare the total partnership income.
If the Precedent Partner of your partnership e-Files the Form P for a YA by 28 February, your income/allocation will be automatically populated in your Form B, without you having to worry about finding out your partnership income separately.
You should not be declaring your portion of income with respect to partnership rent as “other income”.
As an e-filer, you need to declare it under section 2 “Trade, Business, Profession or Vocation" > "Partnership" > "Other Income and Donations from this Partnership" > "Rent".
In the case of paper filing, you need to complete the following items:
You can only make a claim for the partner’s expenses that have resulted solely during the generation of income from your partnership. Also, you must ensure that you haven’t raised a claim already versus the income from your partnership in the “Form P” or any other income you earn.
A few examples of approved expenses include:
A few examples of expenses you cannot claim include:
In Form P, you cannot include partners' salary, CPF, and bonus under the section “Allowable Business Expenses”. You should include it under the section “Partner's salary, Bonus & CPF”.
When you receive income in the form of a rent payment when you rent out your property, you will be liable to pay income tax for the rental income you receive. Your rental income will be inclusive of your complete rent amount and any pertinent payments you get while your property is on rent.
You should make a tax declaration for the previous year’s gross rent of your building and also the details of deductible costs of every single property under the section 'Other Income: Rent from property' in your income tax return.
You will need to include the following details:
When you submit an incorrect income tax return to IRAS without reporting your rental income, you’ll be liable to pay a penalty. In case you make a disclosure voluntarily within 1 year (grace period) starting from your official filing date, there are chances that IRAS might decide to waive your penalty charges.
You will be liable to pay income tax on your overseas income in the following scenarios:
You should make a declaration of the overseas income that is taxable under section “trade income” or “employment income” as per what is applicable for your income tax return.
Filing your income tax incorrectly can lead to excessive penalties and stringent action from the IRAS. If you have made an error while filing your taxes, you must rectify them by re-filing your tax at the earlierst or contacting the IRAS for further assistance.