Do you run a side hustle besides your full-time job? If so, kudos to you for taking the step to start your own business! We all know that filing taxes can be tedious and daunting. But don’t worry—we’ve got you covered with this helpful guide on how to file tax for your business in Malaysia.
Filing your taxes on time is crucial to avoid unwanted penalties or fines. As a business owner, you need to be aware of your different tax obligations. You may have to pay income tax, sales and services tax (SST), or both. Find out the details on how to file taxes here!
Business Income Tax Filing Deadline for 2024
Before we discuss the steps for filing taxes for your side business, it’s essential to know the deadline for filing taxes. If you submit your tax report in person, the deadline is 30 June 2024. However, if you’re filing your taxes online with the e-filing form, you have until 15 July 2024 to submit your tax returns.
Step-by-Step Guide on How to File Tax For Your Side Business in Malaysia
Do you need info on how to file taxes for your side business? Follow these steps to ensure you submit the correct report for your side hustle’s taxes:
1. Choose the correct form
The first step in filing your side business tax is to choose a form according to your business type. You must complete the B form if your business is registered under the Suruhanjaya Syarikat Malaysia (SSM) as a sole proprietorship or partnership.
However, if you don’t register your business or you’re running a freelance side hustle, choose the BE form for people with non-business income. The form will enable you to declare your money as “Statutory income from interest, discounts, royalties, pensions, annuities, other periodical payments, and other gains and profits” according to Section 77 of the Income Tax Act 1967.
2. Prepare the required documents
After knowing what form to choose, you must prepare the required documents. These include your business income statement, receipts and invoices, and other relevant financial documents. Scan them and make sure that all the information there is legible.
3. Submit your form
Finally, remember to submit your form and the scanned documents after you have prepared everything. You can submit your form online or to the Tax Information & Record Management Division of the nearest LHDNM (Lembaga Hasil Dalam Negeri Malaysia) office. If you submit your form online, you must register for an e-filing account via the MyTax System.
Tips for Filing Your Taxes More Easily
Filing side business taxes doesn’t have to be intimidating! Try these tips to make things more convenient and save time:
1. Know your tax deductions and incentives
Knowing your tax deductions and incentives is essential to ease the tax filing process for your side business. As a small business owner, you can claim certain expenses as tax deductions, such as office rent, utilities, and business travel expenses. Additionally, there are tax incentives available for small businesses in Malaysia. For example, the government offers tax incentives for companies that invest in research and development.
2. Learn the tax rate
Another tip for filing your taxes more efficiently is to learn the tax rate. The tax rate for individuals in Malaysia ranges from 0% to 30%, depending on your income bracket. As a small business owner, you must pay tax on your business income, which is usually taxed at 10%.
3. Document and store all your business records well
One of the most important things you can do to make the tax filing process more manageable is to have a robust bookkeeping process. Keeping accurate records of your business income and expenses will make it easier to prepare your tax returns and help you identify any potential tax deductions.
Final Thoughts
How to file taxes for your side business? It’s much easier than you think! Following the steps outlined in this article and keeping accurate records of your business income and expenses, you can file your taxes on time and avoid penalties and fines. Remember, the deadline for filing taxes for the year 2024 is 30 June 2024 (or 15 July 2024 for e-filing), so make sure to stay on top of it.
