It’s that time of year when companies, self-employed persons and employed persons who earn additional income should be in high gear to file their income tax returns.
Here are some tips to make sure it’s done right the first time.
#TAXTIP1: FILING DUE DATE
Tax Returns are due March 15. Persons are required to file Annual Income Tax Return for 2022 and declare estimated income for 2023.
#TAXTIP2: APPLY INCOME TAX THRESHOLD RELATED TO THE CORRECT YEAR
The Income Tax threshold (tax-free amount) for individuals for year of assessment 2022 and 2023 is $1,500,096.
#TAXTIP3: USE CORRECT FORM
Make sure to use the correct tax form applicable to the type of business or income. Individuals, 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 source of income is taxed at source (e.g. PAYE, withholding tax), such as pensioners claiming a refund, should use the IT05 form. Companies use the IT02. Approved Charities are to file using IT12. Also use the form related to the correct year, as changes may have taken place.
#TAXTIP4: COMPLETE FORM CORRECTLY
All relevant sections of the forms and related schedules are to be filled in. It is also important that accounting information, such as gross sales/income, total expenses, net profit, deductions and tax computation are ALL filled in.
#TAXTIP5: CLAIM CREDITS
Employers may claim Employment Tax Credit (ETC) for payroll payments made during the year for Education Tax, NIS, NHT and HEART, provided they were declared and paid ON TIME and IN FULL.
#TAXTIP6: FILE ONLINE
All returns must be filed online. This means corporate bodies, organizations such as Partnerships, Trust & Estates, Building Societies, Life Assurances and registered Charities, must all file their Income Tax Returns
online, i.e. IT02, IT03, IT04, IT07, IT12. Self-employed persons and employed persons with other sources of income must file their Forms S04, S04A, while individuals such as pensioners filing for refunds should file their Form IT05 online.
Specified bodies required to make Assets Tax Declarations (AT02) must also do so online.
#TAXTIP7: FILE EARLY
File early to avoid the last minute rush. Even though returns must be filed online, traffic online will get busier the closer it gets to the March 15 filing deadline, so give yourself time to complete and submit.
#TAXTIP8: AVOID LATE FILING PENALTY
Make sure to file Tax Returns on or before the March 15 deadline, as an automatic penalty, of $5,000 per month or part thereof, is applied to returns filed late… and one day late is still late.
#TAXTIP9: FILE RETURN EVEN IF YOU HAVE A LOSS OR NO INCOME FROM TRADE
All businesses are required to file an income tax return even if the business makes a loss. Currently the law allows for up to 50% of business losses to be claimed against profits in any one year except where the business is within the first six years of trading or has gross sales of $10mil or less in which case there is no limit to the loss claimable against profit in the tax year.
Similarly, even if there is no income from trade, a return should be filed as long as the business is not closed.
#TAXTIP10: ONLINE PAYMENT OPTIONS
Take advantage of the convenient alternate payment channels available instead of visiting a Tax Office to pay taxes due. Persons can pay via the TAJ website at www.jamaicatax.gov.jm using a credit card/debit card with credit card features; Direct Funds Transfer from their bank account to TAJ’s bank account; Using NCB Online, Scotia Online & Mobile App to make a bill payment to TAJ.
#TAXTIP11: PAY SOMETHING IF NOT THE FULL AMOUNT
While a part payment can be made on or by March 15, interest and penalties still apply to unpaid amounts. Estimated payments for 2022 are due quarterly, March 15, June 15, September 15 and December 15, and interest is applicable to late payments.
#TAXTIP12: SEEK HELP
If you are not sure how to go about filing your returns online or making payments or you need assistance, engage an accountant or call the TAJ Customer Care Centre at 888-TAX-HELP or a Taxpayer Education Officer to schedule a virtual Special Taxpayer Assistance Programme (STAP) session. Or visit the Income Tax Hub on the TAJ website www.jamaicatax.gov.jm.