Today, we’re tackling tax preparation and filing for Individuals, including Independent Contractors/Consultants.
Just like businesses, individuals are required to submit a tax return every year. If you have received an income through employment, consulting work, inheritance, lottery or gaming winnings or any other form, you are required to report these and remit any necessary taxes to the government through the Kenya Revenue Authority’s iTax portal. For individuals, tax returns are due before midnight on the 30th of June of each year.
In order to make an accurate assessment of your tax liability, there are certain steps you need to take to make this process smooth and stress free. In this article, we will provide some tips and advice on how to prepare to file your tax return.
- Gather Your Documents
One of the first things you should do is to gather all of your necessary documents. If you are an employee and your job was your only source of income the previous year, all you will need is your P9 form. However, if you had consulting income, commission or any other form of income, you would need to gather your expense receipts. It is important to have these receipts organized by date along with detailed descriptions of the expense. Check our Downloads section for a sample template. Some other documents you might need include:
- Withholding tax certificates. These can also be found on your iTax portal.
- Life Insurance Policy Certificates
- Individual Pension Contribution Records
- Rental Income records
- Landlord information
- Mortgage Certificates
- Education Policy Certificates
- Investment Information
If you are filing a joint return with your spouse, have your spouse’s documents on hand.
- Organize Your Records
Once you have gathered all of your documents, it’s important to organize them in a way that makes sense for you. You may want to sort them by category, such as income, expenses, and investments. It would be helpful to sum up your revenue, expenses and investments per category.
- Check for Errors
Before submitting your tax return, it’s important to double-check for any errors or mistakes. This includes checking your personal information, such as your name, address, and KRA PIN number along with that of your spouse if filing a joint return. You should also check all of your income and deduction information to make sure it is accurate.
- Consider Your Deductions
When preparing your taxes, it’s important to consider all of the deductions you may be eligible for. This includes deductions for charitable donations, medical expenses, and home office expenses. You should also consider any deductions related to retirement accounts, such as individual pension plans and life insurance policies.
- File on Time
Finally, it’s important to make sure you file your tax return on time. The deadline for filing taxes is typically 30th June for Individuals. Plan to file your return prior to the month of June to avoid being affected by iTax system failures which are typical in the final days. Failure to file your return on time attracts penalties.
In conclusion, preparing for tax season in advance can help make the process smoother and less stressful. By gathering your documents, organizing your records, checking for errors, considering your deductions, and filing on time, you can be sure that you are tax compliant.
Reach out to us at info@laeteon.com if you have any questions or concerns about preparing your taxes, tax advisory or tax planning.
You got this!
Ngwing K.