Business Income: Calculation, Accounts and Filing Resources

Follow the Calculation Workflow

Start with taxable receipts and the required statement of accounts, then identify allowable business expenses and deductions. The linked calculation guide explains two-line and four-line reporting. Separate resources cover common filing mistakes and disclosure of previously unreported income. Follow the detailed topic page for the relevant requirement rather than treating the directory as a calculation tool.

Calculate Revenue and Adjusted Profit Separately

Do not report only the money left after paying suppliers. IRAS’s calculation starts with revenue, deducts cost of goods sold to arrive at gross profit, then deducts allowable business expenses to find adjusted profit or loss. Revenue can include customer bills that remain unpaid and goods taken from trading stock for personal use. Personal, private and capital expenses are not ordinary allowable business expenses, even where the payment passed through the business bank account.

The reporting format depends on revenue: use a two-line statement at S$200,000 or less and a four-line statement above S$200,000. A smaller reporting format does not remove the obligation to prepare accounts and keep transaction records. The detailed guide also calls for certified accounts and an adjusted-profit computation where revenue is S$500,000 or more; check the relevant sole-proprietorship or partnership instructions.

Reconcile Partnership and Personal Reporting

The precedent partner files Form P and each individual partner reports the allocated partnership income in Form B or B1. The partnership calculation distinguishes adjusted profit from divisible profit, including the separate treatment of partners’ salaries and related allocations. Retaining profit in the partnership bank account does not postpone the partners’ tax on their allocated income. As a practical check, reconcile the allocation schedule to both the partnership return and each partner’s individual figures, rather than copying the cash drawings as taxable profit.