April is just around the corner, and for Singaporeans, there is a date that’s much more important than April Fool’s Day.
It’s the deadline for filing your income tax with IRAS, which for those of us who aren’t dinosaurs and are therefore e-filing online, is 18 April this year. For those filing the paper tax form, you have until 15 April.
Earning extra income outside of one’s day job is becoming more and more common these days.
More Singaporeans are moonlighting as Grab and Uber drivers to make some spare cash after work, the Internet has made it easier than ever to earn cash through an online business or freelance work, and of course there’s the perennially popular side gig of private tuition.
Well guess what, that additional income is supposed to be declared to the government when you file your taxes!
What is the penalty for not declaring additional income?
Not declaring side income you’re earning outside of your day job is considered tax evasion.
Not filing your tax return correctly could get you fined up to 300% of the amount of the taxes you tried to escape paying, and/or a fine of up to $10,000 and/or up to 3 years of imprisonment.
Serious tax evasion (eg. if you falsify documents) is punished even more severely, with a fine of up to 400% of the amount of the taxes you tried to escape paying, a fine of up to $50,000 and/or imprisonment of up to 5 years.
Just recently, two men were charged for evading taxes on more than $700,000 worth of rental income. So don’t assume the Taxman isn’t watching.
What determines whether you need to declare additional income or not?
Not sure what needs to be declared and what doesn’t?
Well, all these types of additional income should technically be declared to IRAS as additional income.
- Gains or profits from any trade or business
- Income from investment such as dividends, interest and rental
- Royalties, premiums and any other profits from property
- Other gains that are revenue in nature.
Do note, however, that the following are not taxable:
- Capital gains are not taxable in Singapore, so if you sell your property at a higher price than you bought it for, you’re not taxed UNLESS you’re a professional property flipper who deliberately sells properties for profit.
- Dividends from shares in Singapore-resident companies that issue one-tier tax exempt dividends aren’t taxed either. Income from REITS and United Trusts are also generally not taxable.
- Income from fixed deposits and debt securities like bonds is generally not taxable.
This does, however, mean you need to declare all the following types of income:
- Rent received when you rent out or sublet your property, including any forfeited deposits
- Money earned as a Grab, Uber or taxi driver
- Money earned giving tuition or music lessons in exchange for money
- Freelance graphic design work done for clients sourced online
- The value of sponsored products received by an influencer
- Advertising or sponsorship on your blog or social media accounts
How do you declare additional income to IRAS?
IRAS makes it super easy to declare any additional income.
To e-file your taxes, log in to IRAS’ myTax Portal with your SingPass or IRAS PIN.
You will see these sections on the first page when you try to edit your Form B/B1:
1. Employment Income and Expenses
2. Trade, Business, Profession or Vocation
3. Other Income
4. Deductions, Reliefs and Parenthood Tax Rebate
“Part 3 (Other Income)” is the part pertaining to additional income.
Simply update the various amounts to indicate how much you earned. If you already have a day job, then for money from a part-time job, Grab/Uber driving, tuition or freelance work you’d be updating the figure labelled “Income Not Previously Reported”.
That’s pretty much all you need to know to avoid inadvertently breaking the law and getting into trouble with IRAS.
Do you earn any additional income outside of your day job? Tell us what you do in the comments!