Who is a self-employed person?
According to investopedia.com a self employed person is an individual who works for himself instead of working for an employer that pays a salary or a wage. A self–employed individual earns his income through conducting profitable operations from a trade or business that he operates directly.
When do I file my tax returns?
Tax returns for the year should be filed on or before march 15 of the following year.
How do I know how much tax is due?
To file your tax return you will need all the receipts and income for the financial year you are filing for. Add all your income and minus all expenses to arrive at the profit you have made for the year.
Next calculate your statutory deduction. Your statutory deductions are: National Insurance Scheme contribution (NIS), Education Tax (Ed Tax), National Housing Trust (NHT) and Income Tax.
Your (NIS) is 5% of net profit up to a maximum of 1.5 million dollars. This simple means, if your net profit is more than 1.5 million the maximum you will pay for NIS is $75,000.00 for the year. NHT is 3% of Net Profit and Ed Tax is 2.25% after deducting NIS from net profit. Income tax is calculated at a rate of 25% -30% after deducting: Tax threshold, NIS, approved retirement scheme contributions, Capital Allowances, losses and approved donations.
EXAMPLE OF HOW TO CALCULATE TAX LIABILITY
|Less business Expense||750,000.00||750,000.00|
|NIS 5% up to 1.5 mil||75,000.00||37,500.00|
|Statutory Income (Net profit less NIS)||2,175,000.00||712,500.00|
|Less Tax Threshold||796,536.00||796,536.00|
|Taxable Income (Statutory Income less threshold)||1,378,464.00||–|
|Income Tax 25% (Taxable income)||34,461.60||–|
|Ed tax 2.25% (Net profit less NIS)||48,937.50||16,031.25|
|NHT 3% (Net profit )||67,500.00||22,500.00|
Please see below links for self employed tax forms