“ The only two certainties in life are death and taxes.” Chances are you’ve heard this quote before and with the March 15 income tax due date now past, let us get you better prepared for future income tax filing
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If you are a self-employed professional, or simply running a side hustle to gain additional income, this deadline also applies to you, and you should file your income tax returns. By knowing your basic tax responsibilities and rights, it is possible to navigate the tax system effectively, maximise tax savings, and maintain compliance with Jamaica’s tax regulations.

The self-employed are required to pay taxes, too

A self-employed person is essentially their own boss; for example, a business owner, farmer, taxi operator or someone working in private practice such as a doctor, lawyer, accountant, or engineer. They earn income through independent work, rather than being employed by another individual or organisation for a salary or wage. If you are self-employed, you are not exempt from paying taxes, rather, you are solely responsible for compliance.

Fortunately, the process can be completed online via the S04 form (Self-employed Persons Annual Return of Income, Taxes and Contributions). Introduced in 2015, this form has streamlined the tax filing process, as it allows you to complete all your tax obligations in one go. Once completed, you submit it with a copy of your latest balance sheet and profit and loss account.

How much to pay?

The TAJ website provides guidance on the rights and responsibilities of self-employed taxpayers; however, it is wise to also get professional guidance from a suitably qualified professional. For the self-employed, there is information on TRN requirements, filing income tax returns, the applicable rates to apply and information on income and deductions allowed. While the TAJ provides information, it is also advisable to seek professional advice from a qualified tax advisor when doing personal taxes as this may allow you to benefit from provisions within the tax laws to legally reduce the quantum of taxes you pay. Ideally, this consultation should happen before you set up your business and well in advance of the tax deadline.

Do not pay more than you should; focus on tax minimisation

It is crucial to approach filing tax returns with diligence, ensuring you do not overpay by focusing on tax minimisation – the legal reduction of your tax burden.

In this tax season, minimisation is possible through various channels. You should be on the lookout for:

1. Tax Relief – This is when the Government offers you a reduction in taxes, and the taxes you owe in a period are reduced. In this case, the deductible item is subtracted from the total taxable income. Tax relief can come in various forms such as credits for specific capital expenditures or exemptions for certain income sources.

2. Tax Incentives/Exemptions – Apply if your operations are classified under a special economic zone or you legally qualify for a tax incentive.

With tax minimisation comes several advantages

• Greater Reinvestment – Through tax exemptions and tax reliefs, you get to keep more of that hard-earned income allowing you to reinvest in your business, trade, or side hustle. This reinvestment can fuel growth, innovation, and expansion, positioning your business for long-term success.

• Improved Cash Flow – When you are exempt from or benefit from reduced taxes, that is an opportunity to maintain solid cash flows. This results in smoother operations, financial stability, and flexibility to step into new strategic investments.

However, to take advantage of this opportunity, it is important to be familiar with local tax laws or have someone in your corner who is.

Firstly, you should stay up to date with information on how specific taxes are calculated and the amount owed to the Government before filing your returns. Being informed empowers you to make accurate filings and minimise errors.

Secondly, you have the right to appeal a decision made by the tax collector (TAJ, in this case). The Revenue Appeals Division provides a platform to present your case in instances where unforeseen tax directives adversely affect your business operations. You will get to present your case at a sitting, which should result in a fair resolution and, importantly, at no cost to you.

Thirdly, you are required to pay taxes that are rightfully due. Knowing the right amount helps you comply with local tax laws, accurately budget finances, and avoid penalties.

Lastly, you have a right to certainty. The Government is required to publicise accurate and up-to-date information on changes to tax rates, laws, and potential penalties. Staying on top of all these changes, especially if you have a business, trade, or side hustle to run, may require the help of a professional. By staying informed and engaging the services of a professional, you can navigate the tax landscape more confidently and make informed decisions to effectively minimise your tax liabilities. Do not wait until the last minute. Take practical steps today to maximise your tax savings, ensure compliance and see your business, trade or side hustle reap the benefits.

This article provides general information and should not be considered as personalised tax advice. For personalised tax guidance, individuals should consult with a qualified tax professional or advisor.