What you need to know about income tax return forms
As the March 15 income tax due date gets closer and you prepare to file your annual Income Tax Return for last year (2010) and your Declaration of Estimated Income and Tax Payable for the current year (2011), it is very important that you complete the correct forms. The specific forms you will need to complete are based on whether your business is classified as a self-employment, Limited Liability Company, Partnership, Life Assurance Company, etc. You MUST also ensure that all relevant sections of the forms are properly completed with your correct TRN, name, address, trade name, and so on. This will ensure that no difficulties will be encountered in the processing of your income tax returns. The following questions and answers outline who should use what forms.
I am an individual and operate a business, which tax form should I use?
Individuals such as self-employed persons, partners and employees/pensioners taxed under the Pay As You Earn (PAYE) system, but who also have other sources of income in addition to their salaries or wages - such as rent or a business "on the side", MUST file their annual income tax return using a Form IT01.
Remember, persons whose only source of income is from salary and wages, pension, bank interest, dividends and/or other income that is already taxed at source are currently not required to submit an annual income tax return, unless they are directed to do so by the Commissioner.
I own and operate a company, which form should I use?
Persons operating a "Body Corporate", such as a limited liability company should complete a Form IT02, to report their income and tax liability. If as owner of the company, your income from that company is not taxed at source in the company's payroll, then you will need to file your personal tax return, using the IT01 form.
I operate a partnership with my friend, which form should I use to submit my return?
All organisations (unincorporated bodies, other than life insurance) such as Partnerships, Building Societies, Trusts or Deceased Estates and Societies Registered under the Industrial and Provident Societies Act should use a Form IT03 to file their income tax returns.
Remember, each partner must ensure that an individual return Form IT01 is submitted showing their share of the profit/loss in addition to income from other sources.
Is there a special form for a life assurance organisation to use?
Yes. Life Assurance Organizations should complete a Form IT04 in respect of Life Assurance Funds only.
I am a pensioner and entitled to claim a refund for overpayment, which form should I use?
A Form IT05 is to be completed by a pensioner and any other person taxed under the Pay As You Earn system whose source of income is from salaries or wages, pensions, dividends, bank interest and other income from which tax has been deducted at source, in excess of their correct liability.
Remember, when submitting your claim you must attach withholding tax certificates to verify taxes deducted at source. Please note, however, that if you also earn income from other sources, such as rental or you have a business on the "side", you should instead use a Form IT01.
Is there any other form that I may need to use?
Yes. Once you are required to file an income tax return using Forms IT01, IT02, IT03 or IT04 you should also complete a Form IT07. This is a declaration of estimated income and tax payable. This would reflect your estimated income and tax payable for the current year (2011). The estimated tax is to be paid in four (4) equal instalments on or before March 15, June 15, September 15 and December 15. Usually this estimate is based on the prior year's income. If, however, there are known factors that will affect your current year's earnings either positively or negatively, the estimated return should reflect this adjustment. A brief explanation regarding this adjustment should be attached to the return.
Do I need to submit any other information with my tax return?
Yes. If you completed any of the Forms IT01 - IT04, you should also submit a copy of your Balance Sheet and/or Profit and Loss Account (and such other subsidiary accounts as are necessary for a proper understanding of these accounts), along with a copy of your income tax computation. The Income Tax Computation reflects additions to or subtractions from net profit to arrive at the income which is taxable. For example, if a shop-keeper uses some of his stock for personal use, then the value of this is added to the net profit. If he purchased any fixed asset, for example a freezer, then the portion of the cost being allowed as Capital Allowance would be used to reduce the net profit. (Note that the full cost of assets used in the business is allowed for write-off over a number of years as a Capital Allowance at rates determined by Law).
If you are a self-employed individual and the gross receipt for your business is under or equal to $3 million then in addition to submitting a Form IT01, you may use a Schedule 1- Details of Trading instead of preparing Financial Statements. This is a simple guide to helping you prepare your return.
All Tax Return forms, the relevant schedules and Capital Allowance rates are available online at www.jamaicatax.gov.jm or at any of the 29 Tax Offices across the island. For more about tax forms or to get information on obtaining help to complete your income tax return, through a free Special Taxpayer Service Programme, call the Tax Administration Customer Care Centre at 1-888-Tax-Help (1-888-829-4357) toll-free.
Once you have filled out your income tax return forms they are to be submitted at any Tax Office. Remember also that you may register to file and pay your income tax return online through the Jamaica Tax Portal at www.jamaicatax-online.gov.jm
Part 4 of a special series which will run up to the March 15 due date for the filing of income tax returns.