Step by step guide to filing taxes as a consultant on iTax

If you earn income as a consultant, your tax filing is not just a formality.

It’s where you declare what you actually earned, match it with expenses, and account for any withholding tax that clients may have deducted.

Many consultants get stuck here because income comes from different sources like E-TIMS invoices, direct payments, or contracts where tax was already withheld.

Here’s a clear way to handle the process using the iTax system.

Start by visiting the iTax portal at itax.kra.go.ke. Enter your PIN and password. If you’ve forgotten your password, use the reset option on the login page. Once inside, you’ll land on your taxpayer dashboard.

Go to the Returns menu. Select File Return, then choose your tax obligation and click Next.

You’ll then be prompted to download the auto-populated return. This form already contains:

• Your personal details

• Some pre-filled income records

• Any credits already linked to your PIN, like withholding tax

Don’t assume it’s complete. It’s only a starting point.

Open the downloaded return and go to Sheet B. This is where you declare your consultancy income. Add all income earned during the period, including:

• Payments invoiced through E-TIMS

• Payments received outside invoicing systems

• Any consultancy fees paid directly by clients

A common mistake is only relying on pre-filled figures. If you earned it but it’s not captured, you still must declare it.

Next, move to the profit and loss section. Here you list expenses incurred in earning your income. These reduce your taxable profit.

Examples include:

• Office rent or workspace costs

• Internet and phone bills

• Travel costs related to work

• Salaries and wages if you have support staff

• Import-related expenses or outsourced services

Some expenses are automatically validated through E-TIMS, especially those tied to invoices. Others are not, but you can still claim them if they are legitimate.

Examples that may not be validated through E-TIMS include:

• Airline tickets for business travel

• Salaries and wages

• Interest expenses

• Imported goods or services

The key rule is simple: if it helped you earn income, it can usually be justified.

Move to the balance sheet section. Here you declare:

• Assets used in the business (like laptops or equipment)

• Capital introduced into the business

• Liabilities related to your operations

This section helps KRA understand the financial position of your consultancy, not just income and expenses.

Go through the additional sheets, including:

• Investment deductions where applicable

• Installment tax credits if you paid tax in advance during the year

• Payment credits such as withholding tax already deducted by clients

This is important. Many consultants forget that withholding tax is not final tax. It must be claimed here so it reduces your final liability.

If your consultancy made a loss in previous years, you may be allowed to carry it forward. Enter these in the relevant section so they can offset your current taxable income.

Go to the tax computation section. Here you’ll see:

• Total income

• Total allowable expenses

• Taxable income

• Final tax payable

Check this carefully. Small errors in expenses or missing income can change your final tax significantly.

KRA now allows you to declare expenses not captured through E-TIMS.

To do this:

• Go to the Returns menu

• Select Income Tax Return Adjustments

• Choose the option for manual or non-E-TIMS expenses

You will:

1. Select the period

2. Download a CSV template

3. Fill in supplier details, invoice numbers, dates, descriptions, and amounts

4. Attach scanned invoices

5. Upload the CSV back to the system

Do the same if you have accounting or accrual adjustments for income or expenses.

This step is where many people get careless. If your records are messy here, your return becomes risky in case of a review.

Go back to your return and input the values captured under adjustments. Make sure everything aligns with what you uploaded.

Review the full tax computation again.

Confirm:

• Income is complete

• Expenses are valid and supported

• Credits are correctly applied

• Final tax figure makes sense

Then:

• Validate the return

• Upload the final file

• Answer any compliance questions (like rental property ownership if asked)

• Accept terms and submit

If there is tax payable, proceed to payment through the system.

Once submitted:

• Download your acknowledgement receipt

• A copy is also sent to your registered email

That receipt is your proof of filing.