Deductions And Required Supporting Documents, Individual Income Tax Return

Tags: Deductions, Supporting Documents, Income Tax, Return, individual

These deductions are current as of tax year 2014, except where otherwise stated.

Tertiary Education Expenses - limited to $72,000 as of 01/01/2019

  1. Acceptance Letter
  2. Proof of Payment
  3. Statement of Expenses.

Only fees/payments made to a foreign Tertiary Institution will be allowed as an expense.

First Time Home Owner - limited to $25,000 as of 01/01/2015

  1. Where the property is constructed or purchased a copy of the Completion Certificate or Deed of Conveyance respectively must be provided.
  2. The individual must provide evidence of proof of ownership
  3. Certificate of Assessment.
  4. The individual must satisfy the B.I.R. that the house to be used as a residence is a first-time acquisition. The individual must provide an original statement from a financial institution/affidavit confirming first time acquisition and date property was acquired.

Property must have been acquired on or after January 1, 2011. The claim is allowed for five (5) years from the year of acquisition.

Deed of Covenant - limited to 15% of total income

  1. Proof of Payments.
  2. Copy of the Deed of Covenant.

Contributions/Premiums paid to Deferred Annuity/Tax Savings/Pension Fund Plans and 70% NIS contributions - limited to $50,000 as of 01/01/2015

  1. Original document from Insurance Company/Financial Institution.

Alimony or Maintenance - Payments made in accordance with a court order

  1. Copy of Court Order and Proof of Payment.
  2. Affidavit where claim is made in respect of a common law relationship

The Personal Allowance - $84,000 as of 01/01/2021

Travelling Expenses

  1. Statement of expenses incurred (limited to 2/3 of expenses).
  2. Letter from employer certifying your requirement to travel to your official duties, Copy of approval of dispensation where this is granted by Board of Inland Revenue.

Conversion to Guest House

  1. Approval from Ministry of Tourism.
  2. Detailed Statement of Expenditure.
  3. Completion Certificate.

The Tax Credit for a Venture Capital Investment - 30% of face value of bonds purchased

  1. Copy of Tax Credit Certificate.

Purchase of National Tax Free Savings Bonds with maturity of 5, 7, or 10 years - 25% of the face value of bonds purchased, limited to $5,000

  1. Copy of Tax Credit Certificate.

CNG Kit and Cylinder Tax Credit

  1. Provide receipt of purchase and installation cost of CNG Kit and Cylinder.
  2. Certified copy of ownership of vehicle.

Solar Water Heating Equipment Tax Credit

  1. Provide receipt of the cost of the Solar Water Heating System.

Individual Income Tax Deductions & Allowances by Income Year (2016 to 2021)

Individual Income Tax Deductions & Allowances by Income Year (2016 to 2021)

Deduction / Credit

Description

Income Year

Documents Required

2016

2017

2018

2019

2020

2021

Personal Allowance

Available to ALL Resident Individuals

72,000

72,000

72,000

72,000

72,000

84,000

Alimony/ Maintenance

Payments made as a result of a divorce.

Payments made as a result of a common law relationship may qualify under the Co-Habitation Act.

One hundred percent (100%). The claim is limited to of the lesser of Payments made and the amount stated on the Court Order

One hundred percent (100%). The claim is limited to of the lesser of Payments made and the amount stated on the Court Order

One hundred percent (100%). The claim is limited to of the lesser of Payments made and the amount stated on the Court Order

One hundred percent (100%). The claim is limited to of the lesser of Payments made and the amount stated on the Court Order

One hundred percent (100%). The claim is limited to of the lesser of Payments made and the amount stated on the Court Order

One hundred percent (100%). The claim is limited to of the lesser of Payments made and the amount stated on the Court Order

· Court Order.

· Proof of payment-

· Extract from the Magistrate’s Court

· Statement from Place of Employment certifying payments were made

· Statement from Bankers certifying that payments were made

· Signed Receipts from recipient certifying the payments were made

Sworn Declaration at a Commissioner of Affidavit where the persons were in a common law relationship and were living together for more than five (5) years.

Tertiary Education Expenses

· Payments must be made in the year of income

· Only payments made to the foreign person or institution are allowed

· You are allowed only one return travel per year

· Claims are not allowed for Institutions within the Region apart from St. George’s University which is considered a US Institution

· The duration of the course MUST BE at least two (2) semesters or one academic year

· Where the tuition is at a local institution and that institution is affiliated with another outside of the region, the taxpayer is allowed to claim any foreign expenses made in pursuing the course to that foreign institution.

· The Claim is only allowed for expenses on behalf of the taxpayer, his/her spouse or children and may be shared among the persons within the household

60,000

60,000

60,000

72,000

72,000

72,000

· Letter of Acceptance from the foreign Institution

· Detailed Statement of Expenses (tuition, accommodation, travel etc)

· Proof of Payment (Bank/Wire Transfers, Credit Card Statements identifying the payments and/or receipts for any accommodation)

· Some evidence of belonging to the household may be required (Birth Certificate, Marriage Certificate, Guardianship especially if name differs from taxpayer)

· Where the claim is shared among the spouses, letters MUST be written by each of the claimants confirming the sharing amount.

First Time Home Owner

Property must have been acquired on or after 1/1/2011 and either constructed or purchased

The Claim may be shared among the owners of the home

25,000

25,000

25,000

25,000

25,000

25,000

Where the property is

a. Constructed:

· Certificate of Completion from the Regional Corporation in the area the property is situated

· Make a Declaration at a Commissioner of Affidavits stating that you are a First Time Home Owner.

b. Purchased :

· Deed of Conveyance must be provided.

· make a Declaration at a Commissioner of Affidavits stating that you are in fact a First Time Home Owner

c. Purchased via a mortgage facility:

· a statement from the Financial Institution giving the date the Property was Acquired.

· Make a Declaration at a Commissioner of Affidavits stating that you are a First Time Home Owner

· Where the claim is shared amongst the home owners letters MUST be written by each of the owners confirming the sharing amount.

Contributions to Approved Pension Fund Plan/Scheme/Approved Deferred Annuity/Tax Saving Plan/W&O/70% of N.I.S

50,000

50,000

50,000

50,000

50,000

50,000

· Statement from the Financial Institution showing the amount paid and MUST STATE “This Plan is Approved by the Board of Inland Revenue”

· TD4 - Showing amount deducted for each deduction made directly from their wages or salary

Covenanted Donations

Claims can only be made towards Charitable Organisations approved by The Ministry of Finance.

Claims can only me made for the years quoted on the Deed of Covenant and the year in which the payment was made.

Payment is limited to fifteen per cent (15%) of total annual income.

The claim is the lesser of the value of the Deed of Covenant and

the amount paid

Payment is limited to fifteen per cent (15%) of total annual income.

The claim is the lesser of the value of the Deed of Covenant and

the amount paid

Payment is limited to fifteen per cent (15%) of total annual income.

The claim is the lesser of the value of the Deed of Covenant and

the amount paid

Payment is limited to fifteen per cent (15%) of total annual income.

The claim is the lesser of the value of the Deed of Covenant and

the amount paid

Payment is limited to fifteen per cent (15%) of total annual income.

The claim is the lesser of the value of the Deed of Covenant and

the amount paid

Payment is limited to fifteen per cent (15%) of total annual income.

The claim is the lesser of the value of the Deed of Covenant and

the amount paid

· Deed must be duly stamped in accordance with the Stamp Duty Act by the 31st December of the year in which the deed or agreement was executed

· Receipt showing the date and amount paid.

Travelling Expenses

Travelling Expenses can only be claimed by persons who are required to travel in the course of their duties. (wholly and necessarily incurred in the performance of their duties)

2/3 of travelling expenses incurred less approved dispensation

2/3 of travelling expenses incurred less approved dispensation

2/3 of travelling expenses incurred less approved dispensation

2/3 of travelling expenses incurred less approved dispensation

2/3 of travelling expenses incurred less approved dispensation

2/3 of travelling expenses incurred less approved dispensation

· Letter from employer stating the post of the employee, the nature of their duties and that they are required to travel in the course of their duties

· Use of own vehicle

· Schedule of expenses

· The vehicle must be in their name.

Audit may require additional documents to verify certain claims.

Claims may include but not limited to fuel and oil, servicing of the vehicle, mortgage interest of the vehicle, inspection, tyres, repairs and maintenance, renewal of driver’s permit and insurance.

Employer’s NIS Contributions paid for domestic workers

Actual amount expended by the taxpayer for his domestic employees towards NIS

100%

100%

100%

100%

100%

100%

Statement and Copy of receipts for the payments remitted to the NIB

Venture Capital

Amount invested in a Venture Capital Company x Marginal Rate of Tax

30% of the value of the investment

30% of the value of the investment

30% of the value of the investment

30% of the value of the investment

30% of the value of the investment

30% of the value of the investment

Certificate from the Venture Capital Company stating the amount paid

CNG Kit And Cylinder

The purchase and installation of a CNG cylinder and kit in a motor vehicle

25% of the total cost up to a maximum tax credit of

$10 000

25% of the total cost up to a maximum tax credit of $10 000

25% of the total cost up to a maximum tax credit of $10 000

25% of the total cost up to a maximum tax credit of

25% of the total cost up to a maximum tax credit of

25% of the total cost up to a maximum tax credit of

Receipt for the purchase and installation.

Certified copy show the taxpayer is the owner of the vehicle

Solar Water Heating Equipment

The purchase and installation of Solar water heating and equipment for household use

25% of the total cost up to a maximum tax credit of

$10 000

25% of the total cost up to a maximum tax credit of

$10 000

25% of the total cost up to a maximum tax credit of

$10 000

25% of the total cost up to a maximum tax credit of

$10 000

25% of the total cost up to a maximum credit of

$10 000

25% of the total cost up to a maximum tax credit of

$10 000

Receipt for the purchase and installation

National Tax Free Savings Bond

Purchase of NTFSB with a maturity date of five, seven or ten years from the date of purchase

25% of the face value of the bonds up to a maximum tax credit of

$5 000

25% of the face value of the bonds up to a maximum tax credit of

$5 000

25% of the face value of the bonds up to a maximum tax credit of

$5 000

25% of the face value of the bonds up to a maximum tax credit of

$5 000

25% of the face value of the bonds up to a maximum tax credit of

$5 000

25% of the face value of the bonds up to a maximum tax credit of

$5 000

Certificate/Receipt of purchase of the Bonds

Note:

1. If the tax credits for Venture Capital and National Tax Free Savings Bond cannot be fully offset in the year of purchase, the balance must be offset against the next successive year until the tax credit is exhausted but not exceeding three (3) years.

2. Where the TD4(s) does not reflect the full weeks of the year of income, the taxpayer must write a letter giving a proper reason.