Tax filing can be tiresome and complicated, especially if you don’t know how tax systems work. So it can be challenging to know what rules to follow and what benefits you’re entitled to. If you’re not careful, a few careless moves could cause you financial worries. Here are tax mistakes to avoid when filing taxes in Kenya.
- Missing the deadline
Know when your taxes are due. The law requires individuals and corporate to file their returns by 30th June. Suppliers also need to pay for Value Added Tax (VAT) by the 20th of every month. If you miss any deadline, you’ll owe Kenya Revenue Authority (KRA) money, penalties, and interest. And these penalties and interests keep accumulating each day, increasing your tax liability. Besides, if you’re due a tax refund, failing to file on time could delay that refund hurting your business.
- Missing a tax bracket
Another big tax mistake to avoid when filing taxes is missing on your tax bracket. Tax reliefs and exemptions have been available to cushion the economy. But the deal isn’t automatic. As a taxpayer, you need to be aware of the new option and take time to review your 2019, 2020, and 2021 earnings. Ensure you’re using the correct tax brackets and rates when submitting your returns.
- Beware of tax scams
When filing deadlines are on the way, beware of scams. A person could steal your personal information to file fraudulent tax returns. Or direct your tax returns into fraudulently opened bank accounts. So if a person offers to prepare your tax, do background checks before giving them your information. This will save you legal cases and fines.
- Failing to report all your income
Failing to report all your income is another tax mistake that can land you on the KRA audit list. As you prepare to file your taxes, remember that you’re obligated to tell KRA about all your income sources. Be sure to keep track of any extra income, and account for all of it in your return. Whether it is from a side job, interest, pensions, or dividends, declare it. Otherwise, you may have to pay interest on the unreported income or face a penalty.
- Arithmetic mistakes
When preparing taxes, you need to record and do some calculations. So it is vital to be keen with your calculations and inputs. Ensure to double-check your figures before submitting the returns. Otherwise, making errors can lead to penalties and, even worse, an audit. So to decrease chances of making mistakes use software or online tax programs for your calculations.
There is no question; these tax mistakes can cost you lots of money. And avoiding them can save you big time. But tax laws keep changing, and keeping track can be hectic, especially with the pandemic. So it would be best if you had a tax professional who understands them and can help you with your tax matters. Contact us today for professional help.
