Filing corporate taxes as a business owner can be quite a taxing affair without the help of an accountant. We’ve therefore invited Charles Chen, Managing Director from CAP Advisory Partners, to share some of the common mistakes that he has found so that you can hopefully avoid making the same errors while filing your own corporate taxes!
Corporate tax filing common mistake #1: Capital allowance
Tip: Reverse out your depreciation and add back the capital allowance
So a lot of people when they file their corporate taxes, do not reverse out the depreciation, which is actually a non-deductible expense, and add back the capital allowance. So please take note that you should reverse out your depreciation and subsequently include your capital expenditures under the section Capital Allowance For The Year.
Corporate tax filing common mistake #2: Job Support Scheme (JSS) grants
Tip: Less JSS from your taxable income
A lot of you will be happy to know that your Job Support Scheme Grants are not taxable. So take note, please less them all from your taxable income and that should save you a dollar or two.
Corporate tax filing common mistake #3: Carried forward losses
Tip: Keep a record of any losses in previous years
Subject to qualifying conditions, unutilised trade losses can be carried forward indefinitely. A lot of clients do not keep track of their Carried Forward Losses, so when it comes to the time you want to claim, you are unable to do so. Please make sure that you keep proper records of all these things.
What if I need to correct any tax filing errors?
When it comes to correcting tax filing errors, it is encouraged to engage an accountant to do this because there is this program in IRAS called the Voluntary Disclosure Programme where you can voluntarily disclose the errors that you have made previously, in a timely fashion. In doing so, you minimise the penalties that you have and also, perhaps, even have some tax savings at the same time.
Wishing you all the best in this business year!
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