How many of your incomes go to tax? Tenth? Hundreds? or Thousands? or Millions? Here’s ways to save it legally.
Is your tax killing you?
It’s almost at the end of the year. In fact the last quarter. If you happen to read this either at the beginning of the new year or somewhere in the middle, these tips are also working the same – in fact for certain things I mentioned below, the earlier you do it, the more benefits you are getting.
As a person who earns money and lives within a country, paying income tax is one of the obligation that you must do each and every year. Be it coming from your employment, trade, business, profession, vocation, properties, investments, annuities, royalties, and anything else that makes it an income to you.
Little to everyone knowledge is that every governments normally have list of certain conditions in which you may get tax deductions, reliefs and rebates on your reported income tax. And depends on the government itself, some government does auto-include some tax deductions, reliefs and rebates, while other government may require you to act and apply yourself to get the tax deductions, reliefs and rebates.
List of Tax Deductions, Reliefs and Rebates You Can Get.
So here I would like to let you various ways you can do to get tax deductions, reliefs and rebates, what are the options and how much you can save each year.
FYI. I’m living in Singapore, so I’m a Singapore tax resident and though these lists are belong to Singapore, the country that you are living in may have similar things – so make them as your references to check whether or not you can get them as part of your tax deductions, reliefs and rebates. As a good starting point, you can check the country tax website.
These lists below are so far what I can find as tax deductions, reliefs and rebates. There may be more than these lists, which I would be updating in the future.
Do check here for other present and past Singapore news and lobangs you missed or may have missed before.
1) Course Fees Relief
For those who are taking courses and get professional certifications, can get up to $5500 in tax relief.
For more details, you can have it checked here:
2) CPF Cash Topup Relief
For non-Singapore residents, think CPF just like US 401K plan – a contribution pension account.
You can get up to $14000 in tax relief if you are topping up CPF: $7000 to your own CPF account and $7000 to your spouse or parents CPF account.
Since CPF is basically pension account which earn interest, the earlier you topping up, the more benefit (read: interest) you are getting. Do it the earliest possible.
For more details, you can have it checked here:
3) CPF Relief
Another CPF relief, how much you can get depends on how much your CPF contributions are. If you are contibuting $20000 to CPF account, then you’ll get $20000 in tax relief.
For better understanding, do check the following link:
if you are employee:
If your employer is participants of auto-inclusion scheme, you don’t need to file this relief as it will be auto-inluded as part of tax relief.
If you are self-employed:
4) Earned Income Relief
If you are below 55 years old, you’ll get $1000 in tax relief
If you are 55-59 years old, you’ll get $6000 in tax relief
If you are 60 years old and above, you’ll get $8000 in tax relief
This Earned Income relief is auto-included as part of relief on each year Income tax.
For more details, you can have it checked here:
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5) Foreign Maid Levy Relief
To encourage woman to stay in the workforce, if you have foreign maid, you can get up to $1440 in tax relief. This relief is only applicable for woman.
For more details, you can have it checked here:
6) Handicapped brother and sister Relief
You can get up to $5500 in tax relief if you have and support your handicapped siblings/siblings-in-law.
For more details, you can have it checked here:
7) Life Insurance Relief
You can get up to $5000 in tax relief if you are paying life insurance and at the same time your compulsory CPF contribution was less than $5000.
For more details, you can have it checked here:
8) NSMan Relief
If you are NSman, you can get from $1500 to $5000 in tax relief. If your are married, your wife can get $750 in tax relief. Your parents, each can get $750 in tax relief as well.
For more details, you can have it checked here:
9) Parents Relief
You can get from $5500 to $9000 in tax relief if you are staying/taking care of your parents/grandparents.
For more details, you can have it checked here:
10) Spouse Relief
If you are married and your spouse is not working or has annual salary not exceeding $4000, you can get $2000 in tax relief.
For more details, you can have it checked here:
11) SRS (Supplementary Retirement Scheme) Relief
SRS is basically Government initiatives to encourage people to save more for retirement, apart from contributions made to CPF. SRS is tax free before withdrawal. You can get up to $37500 in tax relief if you contribute up to the same amount.
For more details, you can have it checked here:
12) Qualifying Child Relief
If you have child below 16 years old or child doesn’t have annual income more than $4000 or child is doing full time study at university, college, or any other educational institution, you can get $4000/child in tax relief.
For more details, you can have it checked here:
13) Working Mother Child Relief
If you are working woman with child, you can get up to 15% tax relief of your annual salary for 1st child, 20% tax relief of your annual salary for 2nd child, and 25% tax relief of your annual salary for 3rd child and beyond. This tax relief is only applicable for woman.
For more details, you can have it checked here:
Bring It All Togther
So folks, don’t be lazy. Most the things mentioned here require you to act on them to get the tax deductions, reliefs and rebates. And as you can see, they are not small amount – indeed some of them are very big amount such as SRS relief and CPF Top-up cash relief. When combined together, you can save your hard-earned money, rather than goes to tax, better get them into your pocket, savings or investment!
Last year, on top of CPF relief and Earned Income relief, I submit Spouse relief since my wife was not working. This next coming tax year, on top of what I submitted last year, I shall submit additional CPF Cash Top-up relief (read here) and Life Insurance relief (since I took a Life Insurance this year).
By doing so, my income tax charge was way less than it should be. What about you? How much can you save? Do give your comments and thoughts down below on the comment section. Cheers!
For more info about personal income tax in Singapore, you can refer here.
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