The Entrepreneur Weekly hopes to not only help you prepare for this upcoming tax deadline but other tax seasons to come. Today we will dive into how you prepare to file taxes as an entrepreneur in Jamaica. You’ve possibly made it through gruelling tax seasons before or this might be your first as a self-employed person. Wherever you lie on the spectrum, we hope this blog post helps you to navigate.
Filing taxes in Jamaica has become a significantly easier feat with the systems and structures that Tax Administration Jamaica has put in place. In this post, we’ll be going over how to prepare for filing taxes, especially for those entrepreneurs in Jamaica.
Preparation is Key
One of the first steps in preparation is familiarising yourself with what is required of you. In a recent JBDC Virtual Biz Zone webinar, Tax Administration Jamaica reminded participants to ensure they are filling in the correct forms for the relevant periods. For this filing period, entrepreneurs should become acquainted with the following forms they must fill out:
● Individual Income Tax Return form S04 for Y/A 2022
● Individual Income Tax Return form S04A for Y/A 2023
● Income Tax Return for Bodies Corporate form IT02 for Y/A 2022
Record-keeping simply means to secure an accurate record of your income and your expenses and can be as simple as a receipt book or keeping a copy of all your purchases (etc.). TAJ shared five reasons why keeping records can benefit you and these are:
- “Well-kept records may shorten the length of time a tax audit takes to be completed.
- Proper books and records may help you get loans from banks, lending agencies and other creditors.
- Your records will keep you better informed about the financial position of your business.
- Well-kept records can mean tax savings, as it can be used as a reminder of deductible expenses and credits.
- Good records can verify all your business expenses for tax audit purposes.”
It’s important that as an entrepreneur, you keep track of all your income and expenses during the year so that when it comes time for filing taxes, you are able to submit everything correctly without any problems. Forbes Magazine encourages this practice and says “You should keep track of receipts and expenses throughout the year so you can just pull them out at tax time. Sit down with your accountant or another professional once you have everything and talk about which deductions apply to which situations and how much you could save if you claimed them correctly.”
Know Tax Legislation
In a Forbes Magazine article titled Prep Your Small Business For Tax Day With These 14 Smart Steps, Forbes Finance Council shared, “Preparing for tax day can be intimidating for small-business owners, especially for new entrepreneurs. One essential item on your tax-preparation checklist should be to review new tax legislation and changes. Continuing, they said “It’s particularly important for small-business owners to review allowable deductions for their business type, as they could save a lot of money if they qualify with proper documentation.”
Taxes are not the easiest walk around the park and so it is understandable that you will need help along the way. According to the TAJ, “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.”
Be Ready, File Early
As you put measures in place to finish filing by March 15, 2023, it is important to build a system that makes you ready for each tax season. Time is inching closer and to avoid the last-minute rush try to apply early, TAJ shared “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.” TAJ also reminds individuals and businesses to “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.”
JBDC’s Push for Tax Compliance
The Jamaica Business Development Corporation (JBDC) consistently urges entrepreneurs to be tax compliant. Business Development Officer with the JBDC, Ms. Kareem Bent said “The benefits and importance of being tax compliant is that it establishes you as a credible player in the marketplace/environment where transparency is critical. It also forces you to have up-to-date records that you would not normally have if you are operating below the radar.”
Continuing, she said “Having a Tax Compliance Certificate (TCC) indicates to an institution that you are keeping proper books and as such able to access credit from notable lending institutions. Donor agencies and investors deem it to be a sign of good business practice when assessing for financing. It puts the entrepreneur in a favourable position to apply and bid for government contracts.”
Along with the recent Tax Talk series held in partnership with TAJ, the JBDC has done Virtual Biz Zone sessions helping entrepreneurs prepare, such as Preparing to File Taxes that can be found on YouTube https://www.youtube.com/watch?v=GP38nXJJ4bw.