IRAS Tax Deductions for Sole Proprietors: Who Qualifies and What You Get

This scheme allows registered sole proprietors to reduce their taxable income by deducting legitimate business-related costs from their total earnings.

👤Who it's for

This scheme is specifically designed for all registered sole proprietors. If you are running your business as a sole proprietor, you are eligible to use these deductions to manage your tax obligations.

🎁What you get

You can deduct various business expenses from your total income, which helps lower the amount of tax you owe. These deductions cover costs that are essential to running your business. For example, if you work in a creative field, you can claim for the depreciation of equipment, such as camera gear. You can also claim for recurring costs necessary for your operations, such as software subscriptions used for your professional work.

💰What it costs you

There is no direct fee to claim these deductions, but there is a significant requirement regarding your record-keeping. You must keep all original receipts and documentation for every business expense you claim. These records must be stored and made available for five years to ensure you are compliant with tax regulations.

⚠️The catch to know

The most important rule to remember is that you cannot claim personal expenses as business expenses. Every deduction must be strictly for business purposes; if an expense is for your personal life rather than your professional work, it cannot be used to reduce your taxable income.

📝How to apply

1. Identify and list all business-related costs, such as equipment depreciation or software subscriptions.
2. Collect and organize all physical or digital receipts for these expenses.
3. Ensure you have kept these records for the required five-year period.
4. Submit your information through the official portal during your tax filing.

For more information, visit the official portal: https://www.iras.gov.sg