For sole-proprietors/self-employed (freelancers, commission agents, taxi drivers,hawkers...)

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Avoid Common Filing Mistakes in your Industry

	Common Filing Mistakes made by Remisier	The Correct Way to File
(a)	Categorisation of income - Remisier income declared as employment income	As a Remisier receiving commission for your services, you are considered to be a self-employed person. When e-Filing: You have to declare your income as trade income under item 3 'Trade, Business, Profession or Vocation'. When Paper Filing: Form B: Complete items 6 to 9 on Page 2. For revenue of $500,000 or more, you need to submit Statement of accounts certified by you as true and correct.
(b)	Claim for expenses - No record or receipts to substantiate claims, especially for expenses on entertainment and gift	All expenses should be recorded to indicate that expenses have been incurred. Receipts are to be kept for at least 5 years for verification when required. Generally, the following details of expenses are to be recorded and receipts kept: Date of expense incurred Nature of expense Amount incurred Identity of person(s) receiving payment Additional details to be recorded for: Entertainment Reason(s) entertainment is required How is it related to the production of your income Name, identification number and capacity of person(s) entertained Gift Reasons(s) gift is required How is it related to the production of your income Name, identification number and capacity of person(s) receiving the gift If you are related to the recipient, please state the nature of relationship
	- Personal and private expenses claimed as entertainment and gift expense (e.g. entertaining self and family)	Personal and private expenses are not to be claimed as they are not business expenses and therefore are not tax deductible.
	- Private car expenses claimed	Expenses claimed on the use of private car are prohibited from deduction under the Income Tax Act even if the expenses are incurred for business purposes.

Common Filing Mistakes made by Remisier

The Correct Way to File

(a)

Categorisation of income

- Remisier income declared as employment income

As a Remisier receiving commission for your services, you are considered to be a self-employed person.

When e-Filing:
You have to declare your income as trade income under item 3 'Trade, Business, Profession or Vocation'.

When Paper Filing:
Form B: Complete items 6 to 9 on Page 2.

For revenue of $500,000 or more, you need to submit Statement of accounts certified by you as true and correct.

(b)

Claim for expenses

- No record or receipts to substantiate claims, especially for expenses on entertainment and gift

All expenses should be recorded to indicate that expenses have been incurred. Receipts are to be kept for at least 5 years for verification when required.

Generally, the following details of expenses are to be recorded and receipts kept:

Date of expense incurred
Nature of expense
Amount incurred
Identity of person(s) receiving payment

Additional details to be recorded for:

Entertainment

Reason(s) entertainment is required
How is it related to the production of your income
Name, identification number and capacity of person(s) entertained

Gift

Reasons(s) gift is required
How is it related to the production of your income
Name, identification number and capacity of person(s) receiving the gift
If you are related to the recipient, please state the nature of relationship

- Personal and private expenses claimed as entertainment and gift expense (e.g. entertaining self and family)

Personal and private expenses are not to be claimed as they are not business expenses and therefore are not tax deductible.

- Private car expenses claimed

Expenses claimed on the use of private car are prohibited from deduction under the Income Tax Act even if the expenses are incurred for business purposes.

	Common Filing Mistakes made by Real Estate Agent	The correct way to file
(a)	Categorisation of income - Real Estate Agent income declared as employment income	As a Real Estate Agent receiving commission for your services, you are considered to be a self-employed person. When e-Filing: You have to declare your income as trade income under item 3 'Trade, Business, Profession or Vocation'. When Paper Filing: Form B: Complete items 6 to 9 on Page 2. For revenue of $500,000 or more, you need to submit Statement of accounts certified by you as true and correct.
(b)	Claim for expenses - No record or receipts to substantiate claims, especially for expenses on entertainment and advertisement	All expenses should be recorded to indicate that expenses have been incurred. Receipts are to be kept for at least 5 years for verification when required. Generally, the following details of expenses are to be recorded and receipts kept: Date of expense incurred Nature of expense Amount incurred Identity of person(s) receiving payment Additional details to be recorded for: Entertainment Reason(s) entertainment is required How is it related to the production of your income Name, identification number and capacity of person(s) entertained Advertisement Type/Mode of advertisement Address of property advertised
	- Private car expenses claimed	Expenses claimed on the use of private car are prohibited from deduction under the Income Tax Act even if the expenses are incurred for business purposes.
	- Personal insurance claimed e.g. personal accident, medical and life insurance for the sole-proprietor/partner	Insurance taken to protect business premises from hazards and on employees is allowable business expense. Insurance taken on the sole-proprietor/partners are private expenses and are not to be claimed as business expense.

Common Filing Mistakes made by Real Estate Agent

The correct way to file

(a)

Categorisation of income

- Real Estate Agent income declared as employment income

As a Real Estate Agent receiving commission for your services, you are considered to be a self-employed person.

When e-Filing:
You have to declare your income as trade income under item 3 'Trade, Business, Profession or Vocation'.

When Paper Filing:
Form B: Complete items 6 to 9 on Page 2.

For revenue of $500,000 or more, you need to submit Statement of accounts certified by you as true and correct.

(b)

Claim for expenses

- No record or receipts to substantiate claims, especially for expenses on entertainment and advertisement

All expenses should be recorded to indicate that expenses have been incurred. Receipts are to be kept for at least 5 years for verification when required.

Generally, the following details of expenses are to be recorded and receipts kept:

Date of expense incurred
Nature of expense
Amount incurred
Identity of person(s) receiving payment

Additional details to be recorded for:

Entertainment

Reason(s) entertainment is required
How is it related to the production of your income
Name, identification number and capacity of person(s) entertained

Type/Mode of advertisement
Address of property advertised

- Private car expenses claimed

Expenses claimed on the use of private car are prohibited from deduction under the Income Tax Act even if the expenses are incurred for business purposes.

- Personal insurance claimed e.g. personal accident, medical and life insurance for the sole-proprietor/partner

Insurance taken to protect business premises from hazards and on employees is allowable business expense. Insurance taken on the sole-proprietor/partners are private expenses and are not to be claimed as business expense.

	Common Filing Mistakes made by Lawyer	The correct way to file
(a)	Claim for expenses - No or incomplete record keeping to substantiate claim for entertainment expenses	All expenses should be recorded to indicate that expenses have been incurred. Receipts are to be kept for at least 5 years for verification when required. Entertainment expenses incurred for business purposes may qualify for tax deduction. To support the claim for entertainment, it is important to keep complete records and proper receipts to show that your entertainment expenses are incurred for business purposes. Generally, the following details of the expenses are to be recorded and receipts kept: Date and place of entertainment Name of the person(s) entertained Purpose of entertainment Identity of person incurring it Amount incurred
	- Private car expenses claimed	Expenses claimed on the use of private car are prohibited from deduction under the Income Tax Act even if the expenses are incurred for business purposes.
	- Inadequate or incomplete record keeping to substantiate claim for expenses on travelling and transport	Taxi receipts to substantiate the public transport expenses and receipts or other travel documents to substantiate the travel expenses, including meals & accommodation, should be kept for at least 5 years for verification when required. Public transport expenses and overseas travel expenses incurred for business purposes may qualify for tax deduction. Generally, the following details of the expenses are to be recorded and the receipts kept: Transport Date of expense incurred and destination Mode of transport Identity of the person incurring it Purpose of travel Amount incurred Travelling Date of expense incurred and destination Mode of transport Identity of the person incurring it Purpose and duration of overseas travel Amount incurred
	- Personal and private expenses claimed as business expenses	Personal and private expenses are not to be claimed as they are not business expenses and therefore are not tax deductible. The non-deductible expenses would include: Insurance premiums for policies taken on the sole-proprietor and partners' lives. Club subscriptions and entrance fees paid for the sole-proprietor and partners' membership. Private entertainment Medical expenses incurred for the sole-proprietor and partners. Sole-proprietor's personal income tax.

Common Filing Mistakes made by Lawyer

The correct way to file

(a)

Claim for expenses

- No or incomplete record keeping to substantiate claim for entertainment expenses

All expenses should be recorded to indicate that expenses have been incurred. Receipts are to be kept for at least 5 years for verification when required.

Entertainment expenses incurred for business purposes may qualify for tax deduction. To support the claim for entertainment, it is important to keep complete records and proper receipts to show that your entertainment expenses are incurred for business purposes.

Generally, the following details of the expenses are to be recorded and receipts kept:

Date and place of entertainment
Name of the person(s) entertained
Purpose of entertainment
Identity of person incurring it
Amount incurred

- Private car expenses claimed

Expenses claimed on the use of private car are prohibited from deduction under the Income Tax Act even if the expenses are incurred for business purposes.

- Inadequate or incomplete record keeping to substantiate claim for expenses on travelling and transport

Taxi receipts to substantiate the public transport expenses and receipts or other travel documents to substantiate the travel expenses, including meals & accommodation, should be kept for at least 5 years for verification when required.

Public transport expenses and overseas travel expenses incurred for business purposes may qualify for tax deduction. Generally, the following details of the expenses are to be recorded and the receipts kept:

Transport

Date of expense incurred and destination
Mode of transport
Identity of the person incurring it
Purpose of travel
Amount incurred

Travelling

Date of expense incurred and destination
Mode of transport
Identity of the person incurring it
Purpose and duration of overseas travel
Amount incurred

- Personal and private expenses claimed as business expenses

Personal and private expenses are not to be claimed as they are not business expenses and therefore are not tax deductible. The non-deductible expenses would include:

Insurance premiums for policies taken on the sole-proprietor and partners' lives.
Club subscriptions and entrance fees paid for the sole-proprietor and partners' membership.
Private entertainment
Medical expenses incurred for the sole-proprietor and partners.
Sole-proprietor's personal income tax.