With the income tax filing season just around the corner, here are some things to remember.
WHO NEEDS TO DECLARE INCOME
The following groups of individuals are required to declare their income to the Inland Revenue Authority of Singapore (Iras).
•Any self-employed person who has received annual net business income exceeding $6,000 in the previous year in Singapore; and
•Any individual who has received an annual income (from employment, rental, business, and so on) exceeding $22,000 in the previous year here.
TAX OBLIGATIONS & DEDUCTIONS FOR THE SELF-EMPLOYED
An individual is considered self-employed if he earns a living by carrying on a trade, profession or vocation, including freelancers, commission agents, taxi drivers and hawkers.
This also includes a person who gets paid for doing part-time/ freelance work and the money received by him for goods sold or services rendered are considered his income from trade.
All self-employed persons (including freelancers) must report the income earned from their business operations (including from freelance work) as business income, not salary.
The business income is part of a person's total income before reliefs, which is taxed at individual income tax rates. Self-employed people are required to keep accounts, prepare statements and file their business income during the individual income tax filing season.
For more comprehensive information on filing matters, refer to the detailed Guide for the Self-Employed available on the Iras website. On common tax deductions individuals can claim to reduce taxes, refer to Deductions for Self-Employed/Partners (Reliefs, Expenses, Donations).
Iras said: "We encourage all self-employed/contracted individuals to keep proper records and accounts so that the income earned and business expenses claimed can be readily determined.
"You must be able to support your records and accounts with invoices, receipts, vouchers and other supporting documents... estimates and improper records are not acceptable."