Sat | Oct 21, 2017

10 tax tips from TAJ

Published:Sunday | March 12, 2017 | 12:00 AM

Tax Administration Jamaica has issued the following tax tips as tax day approaches.

 

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 per cent. The tax rate for individual income in excess of $6 million, earned after July 1, 2016 is 30 per cent.

Companies regulated by the Financial Services Commission, the Office of Utilities Regulation, the Bank of Jamaica and the Ministry of Finance & Planning still pay at the rate of 33.33 per cent.

 

3. Use correct form

 

Using the incorrect form may have an implication on how you or your business is categorised. 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, for example PAYE or withholding tax, should use the IT05 form.

Companies use the IT02 form.

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 in line at a tax office. Filing online using the upgraded Revenue Administration Information System (RAiS) www.jamaicatax.gov.jm allows you to do more with 24/7 access.

 

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; and 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 per cent 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, visit a Special Taxpayer Assistance Programme session at various locations across the island, or log on to the Income Tax Information Hub - www.jamaicatax.gov.jm - for more details.