With just four days remaining to the MARCH 15 Income Tax filing due date, here are Ten Tax Tips that we invite you to note which will hopefully keep the tax police from knocking on your door..
1. Due Date
The due date for filing income tax returns is March 15. Remember you are required to file your annual return for 2016 and declare your estimated income for 2017.
2. Apply income tax threshold related to the correct year
The income tax threshold was increased to $1,000,272 on July 1, 2016. However, an effective threshold of $796,536 is to be used for year of assessment 2016. In filing the estimated return for year of assessment 2017 an effective threshold of $1,375,140 is to be applied, as the threshold will be further increased to $1,500,096 on April 1, 2017. The tax rate for individuals and unregulated companies remains at 25%. The tax rate for individual income in excess of $6M, earned after July 1, 2016 is 30%. Companies regulated by the FSC, OUR, BOJ and MoFP still pay at the rate of 33⅓%.
3. Use correct form
Using the incorrect form may have an implication on how you or your business is categorized. This is particularly important for pensioners or employees, who have no other source of income and are taxed at source, but are claiming a refund on tax paid in excess of their actual liability. Individuals who are self-employed or employed with other sources of income, as well as persons with multiple employment should use the consolidated S04 form, while individuals whose only income is taxed at source, e.g. PAYE or withholding tax, should use the IT05 form. Companies use the IT02. It is also important to use the form related to the correct year.
4. Complete form correctly
It is important that all relevant sections of the income tax form are filled in properly. Basic information such as Name, TRN and Address are important. It is also vitally important that accounting information, such as gross sales/income, total expenses, net profit, deductions and tax computation are ALL filled in on the form.
5. File online
It is more convenient and cost effective to file tax returns online, instead of having to wait inline at a tax office. Filing online using the upgraded Revenue Administration Information System (RAiS) at www.jamaicatax.gov.jm allows you to “Do More” with 24/7 access. Contact the TAJ Customer Care Centre at 1-888-TAX-HELP (829-4357) or visit the website for details to register or learn “How To”.
6. File early
File early to avoid the last minute rush. Traffic in the tax office, as well as online gets busier the closer it gets to the March 15 income tax deadline.
7. Keep records
It is in your best interest to keep good records as these can benefit you. Well-kept records may shorten the length of time for an audit; remind you about deductible expenses and credits that you are entitled to; verify your business expenses; keep you informed about the financial position of your business.
8. File return even if you have a loss
All businesses, whether operated as an individual, partnership or company, are required to file an income tax return even if the business makes a loss. In fact, it is in your interest to report the loss, as currently the law allows for up to 50% of business losses to be claimed against profits in any one year.
9. Pay Something if not the full amount
File your return on time and pay as much as you can then, allowing you to cut down on interest charges. While you have to make a "down payment" to the TAJ on or by the March 15, you will have to pay interest to the TAJ on what you owe, plus any penalties. Remember also that in relation to the estimated return for 2017, payments are due quarterly, March 15, June, 15, September 15 and December 15, and interest is applicable to late payments.
10. Seek help
If you are not sure how to go about filing your returns or you need assistance call 1-888-TAX-HELP or visit a Special Taxpayer Assistance Programme session, at various locations across the island.
Visit the Income Tax Information Hub on the TAJ website @ wwww.jamaicatax.gov.jm for more details