Common mistakes made by self-employed persons, sole-proprietors and partners when filing the annual tax return (Form B/ B1/ P).
On this page:
1. Declaration of trade income
I declare my income as Employment or Other Income in Form B/ B1 if I am a self-employed person such as:
- Commission agent (e.g. insurance agent, real estate agent)
- Hawker
- Private tutor
The correct way to file
When e-Filing:
You should declare your income as trade income under item 2 "Trade, Business, Profession or Vocation" > "Sole-Proprietorship/ Self-Employed Income".
When Paper filing:
- Form B: You should declare your income in the 4-Line Statement (i.e. items 6 to 9)* under section 1a. "Sole-Proprietorship/ Self-Employed Income 1" in page 2.
* For revenue of $200,000 or less, you only need to report a 2-Line Statement (i.e. Revenue (item 6) and Adjusted Profit/ Loss (item 9). - Form B1: You should declare your income in "Other Income" under section A in page 2 and complete section 1 "Trade, Business, Profession or Vocation" in Appendix 1.
2. Not filing your Income Tax Return
I do not have to file my Income Tax Return as my organisation has submitted my income information to IRAS.
The correct way to file
For details on how to file your Income Tax Return, please refer to the step-by-step e-Filing video guide or ChatBot Assistant.
You are not required to file your Income Tax Return only if you have received a SMS notification from IRAS informing you that you are under ‘No-Filing Service’. However, you may verify your details by logging in to myTax Portal and have the option to make relevant changes via e-Filing, if needed.
Please refer to IRAS’ website for details on your filing obligation as a self-employed person and Pre-filling of income for self-employed persons.
3. Declaration by commission agents
I am a property/ insurance agent who earns commission. I do not have to declare my self-employment income as my commission-paying organisation will submit my income information to IRAS.
The correct way to file
Your organisation may be required to submit your total gross income to IRAS to enable us to pre-fill in your Income Tax Return. To check if your commission-paying organisation is required to submit your income information to IRAS, you can use the Commission-Paying Intermediary search engine (XLS, 193KB).
| If your organisation has submitted your commission income to IRAS and your income is pre-filled in your Income Tax Return | If your organisation does not submit your commission income to IRAS and/ or your income is not pre-filled in your Income Tax Return |
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You are required to:
| You are required to:
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Please refer to the step-by-step e-Filing video guide or ChatBot Assistant for details on how to e-File your Income Tax Return.
4. Declaration of estimated income/ expenses
I declare an estimated trade income as I do not keep proper records of my daily earnings/ commission/ expenses.
The correct way to file
As a self-employed person, you are required to keep proper records and accounts of your business transactions for 5 years.
Estimates and improper records are not acceptable. For more information, please refer to Keeping proper records and accounts.
5. Claim for self-employed CPF relief
I have contributed CPF as a self-employed person last year, therefore I should indicate the amount contributed in my Form B so as to qualify for the relief.
The correct way to file
CPF relief for a self-employed is allowed automatically based on information received from CPF Board. You need not indicate your claim.
Self-employed CPF relief is allowed if:
- you have an assessable trade income
- you are making the contribution as a self-employed person
- your contribution was made before 31 Dec of the preceding year.
The section below highlights the common mistakes made by partners and partnerships:
6. Declaration of partner's salary
I declare my salary received as a partner under the 'Employment Income' or 'Sole-Proprietorship/ Self-Employed Income' section in Form B/ B1.
The correct way to file
You should declare your salary/ bonus/ CPF/ benefits (remuneration) received as a partner under "Partnership" Income.
When e-Filing:
You should declare it as 'Partner's Salary, Bonus & CPF' under section 2 "Trade, Business, Profession or Vocation" > "Partnership".
When Paper filing:
- Form B: You should declare it in "Your Salary/ Bonus/ CPF/ Benefits from Partnership" under item 1b "Partnership' in page 2.
- Form B1: You should declare it in "Other Income" under section A in page 2 and complete section 1 "Trade, Business, Profession or Vocation" in Appendix 1.
7. Declaration of partnership income
I do not know my share of the partnership income, so I:
- do not declare it in my Form B; or
- declare the total partnership income in my Form B.
The correct way to file
You should obtain your share of the partnership income from the precedent partner and declare it in your Form B before submitting it.
However, if the precedent partner of the partnership e-Files Form P for Year of Assessment 2024 by 29 Feb 2024, the partnership allocation will be pre-filled in your Form B.
8. Claim for partner’s expenses in Form B
I am a partner and I claim expenses in my Form B when expenses are already charged to the partnership’s profit and loss account.
The correct way to file
You cannot claim expenses in your individual Income Tax Return (Form B) when the expenses were charged to the partnership’s profit and loss account as the expenses would be claimable as deductions in the partnership Income Tax Return (Form P).
Please refer to Business expenses and deductions more details.
9. Claim for partner’s salary in Form P
Claiming salary, bonus and CPF paid to partner under 'Allowable Business Expenses' in Form P.
The correct way to file
Partners' salary, bonus, CPF are not to be included under "Allowable Business Expenses" in Form P. You should enter it as "Partner's Salary, Bonus & CPF" in Form P.
10. Not filing Form B as a partner of partnership
My precedent partner has submitted Form P, so I do not need to file my Form B or declare my share of partnership income in my Form B.
The correct way to file
You are still required to file your Form B to declare your share of the partnership income and your income from other sources, if any.
However, if the precedent partner of the partnership e-Files Form P for Year of Assessment 2024 by 29 Feb 2024, your share of the partnership income will be pre-filled in your Form B.
11. Not filing Form P for partnership
My partner(s) had filed his/ her Form B, so I do not need to file Form P.
The correct way to file
The precedent partner is still required to file Form P on the partnership income.
12. Declaration of partnership rent
I declare my partnership rent income as Other Income.
The correct way to file
When e-Filing:
You should declare your share of partnership rent income under section 2 "Trade, Business, Profession or Vocation" > "Partnership" > "Declare Other Income and Donations from this Partnership" > "Rent".
For Paper filing:
- Form B: You should declare your share of partnership rent income in "Rent" under item 1b "Partnership 1" in page 2.
- Form B1: You should declare it in item 3 "Other Income" under section A in page 2 and complete item 1 "Trade, Business, Profession or Vocation" in Appendix 1.