Nowadays more people are choosing to go the self employed route for more flexible hours. These may include entrepreneurs, freelancers, insurance agents, property agents, taxi drivers, etc.
If you are a self employed, most likely you won’t have a HR staff to help you submit your income tax filing. That means you must file income tax yourself or hire someone to do it for you.
Nobody like to pay excessive taxes. The lesser tax you pay, the more disposable income you have for investment opportunities and lifestyle expenses.
Arguably, the easiest way to reduce your taxable income is by deducting your transport and entertainment expenses incurred for your business from your gross income.
Most self employed need to travel and entertain customers. As reimbursements for business expenses incurred do not constitute any monetary benefit to the employee, they are not taxable.
To support the payments made are business expenses, proper records have to be kept and presented upon the request of the tax comptroller. There are many iPhone and Android apps that you can use to track your business expenses on your smartphone. Look for one which allow you to export or sync to your desktop. Alternatively you can also use Google Sheets or MS Excel to do the same thing. The key is to keep track on a daily basis.
But please note that reimbursements for the cost of travelling from your home to your office and vice versa cannot be claimed, because it isn’t deemed as business travel.
For more information, download the IRAS e-Tax Guide from IRAS website.
