Update: As part of support measures in light of the COVID-19 situation, the due date for filing of personal income tax returns has been extended to 31 May 2020.
Tax season 2020 is here! If you’ve yet to file your taxes because, “still got time”, you’re not alone. But why risk it, especially when the consequences of accidentally missing the 18 Apr 2020 deadline are so not worth it?
Here’s a quick way to make sure you’ve maximised your reliefs and file your taxes – and be done for this year’s tax season.
1. Find out if you’re required to file your taxes this year
2. File your taxes or preview your Notice of Assessment (tax bill) by logging in to https://mytax.iras.gov.sg using your SingPass
3. Edit your tax return and claim the tax reliefs available to you
Your income information may have already been pre-filled in your tax return if your employer is under the Auto-Inclusion Scheme. This means that your employer submits your income information to IRAS on your behalf so you need not calculate your past year’s income all over. However, if you received additional income in 2019 or spot an error in your tax return, hit “Yes, I have other income to declare or changes to the reliefs” to ensure that these are correctly reflected.
Tax reliefs and deductions are targeted at certain groups of people to encourage social and economic objectives, such as filial piety and the advancement of skills. If you are eligible for any of the tax reliefs below, be sure to make your claims for them in your tax return to lower your tax payable.
4. Cross tax filing off your to-do list and look out for your tax bill
When you’re ready, hit Submit before logging out. An acknowledgement message will be displayed upon successful submission of your tax return, and with that, you’re all done with your tax matters! You’ll know how much your final tax payable comes up to when your tax bill arrives – by mail or digitally. Make payment for the tax bill, or sign up for GIRO to automate your tax payments across 12-month instalments.
And if you’re wondering where all that tax money go to, check out this video.
Lower your tax bill by maximising the tax reliefs available to you, and pick up some tax filing tips for a smooth tax season.
Tax season 2019 has begun, and like most Singaporeans, you may once again be required to file your taxes this year. From filing your taxes to utilising the tax reliefs at hand, here’s a quick way to a breezy tax season.
5 minutes: Find out if you are required to file your taxes this year
To file your taxes or preview your Notice of Assessment, log in to https://mytax.iras.gov.sg using your SingPass.
10 minutes: Edit your tax return and claim the tax reliefs available to you
Your income information may have already been pre-filled in your tax return if your employer is under the Auto-Inclusion Scheme. This means that your employer submits your income information to IRAS on behalf of you. However, if you received additional income in 2018 or spot an error in your tax return, hit ’Yes, I need to edit my Tax Form’ to ensure that these are reflected in your return.
Tax reliefs and deductions are targeted at certain groups of people to encourage social and economic objectives, such as filial piety and the advancement of skills. If you are eligible for any of the tax reliefs below, be sure to make your claims for them in your tax return for a lower tax bill!
When you’re ready, hit Submit before logging out. An acknowledgment message will be displayed upon successful submission of your tax return. Your tax bill will be sent to you between end Apr and Sep 2019. In the meantime, sign up for GIRO if you have yet to for a hassle-free tax payment experience.
Remember, file your taxes at myTax Portal by 18 Apr 2019 to avoid the last-minute rush and late filing penalties.
Individuals, corporations, trustees, and partnerships that are carrying on profession, trade, or business in Singapore are chargeable with tax. Fortunately for you, the country offers one of the lowest tax rates in the world.
Whether you are entering the country’s working scene as a local citizen, a fresh graduate or a foreign worker, you must familiarize yourself with the taxation regulations. Start by reading this guide…
AUTHORITY
The Inland Revenue Authority of Singapore (IRAS), formed in 1960, is the statutory board responsible for collecting personal income taxes, corporate taxes, goods & services taxes, property taxes, betting taxes, and stamp duties. In short, it integrates all the revenue collection agencies into one place in order for the processes to be managed better.
The governing laws include Income Tax Act, Goods & Services Tax Act, Stamp Duties Act, and Property Tax Act.
TYPES
For your reference, here are some of the most common types of taxes in Singapore:
INCOME TAXES are charged based on the income of individuals and companies.
GOODS & SERVICES TAXES (GST) are the tariff paid when you spend on merchandise, services, and imported goods.
PROPERTY TAXES are charged to the owner/s based on the expected rental values of the said properties.
BETTING TAXES are paid when betting on the lottery, sweepstakes, or alike.
STAMP TAXES are imposed on legal and commercial documents.
TERMS
To avoid confusion, here are some of the most common terms related to income taxes:
NOTICE ASSESSMENT (NOA)
– NOA shows the amount of income subjected to tax, calculates the tax amount you have to pay, and displays the credit balance that needs to be refunded to you. Simply, NOA is your tax bill.
YEAR OF ASSESSMENT (YA)
– YA refers to the annum in which the income tax is charged and calculated. It is a no brainer!
BASIS PERIOD
– Basis period refers to the previous YA that is relevant to the current YA.
PERSONAL RELIEFS
– Personal reliefs are good news as they are the deductions that help you to save tax.
ASSESSABLE INCOME
– Lastly, the assessable income refers to your total income after subtracting the approved donations and allowable expenses.
Image Credits: pixabay.com (CC0 Public Domain)
For more information about what is taxable and what is not, please visit www.iras.gov.sg.
When the year is coming to a close, the taxman dress up as Santa Claus and comes knocking on your door. If you have earned at least $22,000 in a year, you will receive a notification from IRAS to file your tax return between February and March.
Nobody like to pay tax. Let’s admit it.
Fortunately, there is a way to not pay it or reduce the total tax liability payable. No and this guide is not going to teach you how to evade tax which is illegal in Singapore.
First thing first, before you learn the various ways on how to reduce your income tax, you need to know how the taxman calculate your taxable income.
There is a nifty calculator in Excel on IRAS website that you can download. There is also an iPhone App call IRAS SG that you can use to calculate your income tax payable.
In short, your chargeable income is calculated as (Employment Income – Employment Expenses) + (Other Income) – (Approved Donations) – (Personal Reliefs). If you are a parent, you can further reduce the tax by claiming Parenthood Tax Rebate (PTR).
From the equation, it is obvious that besides being poor, there are three things you can work on – approved donations, personal reliefs and rebates to reduce or eliminate your income tax payable.
1. Approved Donations
If you are not aware, you can claim 2.5 times the donated amount. For example, if you have made donation of $10,000 to an approved Institutions of Public Character (IPC). Your tax deduction would be $25,000. You can check if an organisation is an IPC here.
Things that you can donate are cash, shares, computer peripherals, artefacts, public art, land and building.
2. Personal Reliefs
There are many reliefs which you can claim to reduce your income tax payable. Let’s take a look at the various reliefs.
a. Earned Income Relief
This is basically a relief to recognise individuals who receive income from work. This will be automatically deducted if you are eligible up to a certain cap. You do not need to claim for this.
b. Spouse/handicapped spouse relief
You can claim for this if your spouse is earning less than or equal to $4,000 a year. You can claim $2,000 for spouse relief and $3,500 if your spouse is handicapped. (From YA2015, you can claim $5,500 for handicapped spouse)
c. Qualifying/handicapped child relief (QCR/HCR)
Likewise, if you have kids you can claim $4,000 per child or $5,500 for handicapped child. (From YA2015, you can claim $7,500 for handicapped child)
d. Working mother’s child relief
This relief is to encourage women to remain in the workforce after having children. The amount you can claim ranges from 15-25% depending on the number and order of children. Please note that there is a cap of $50,000 per child, which includes QCR/HCR.
e. Parent/handicapped parent relief
This relief is to promote filial piety and you can claim for this if the dependant shared the same roof as you. If the dependant is staying in a different household, you must have incurred at least $2,000 in supporting him/her to be eligible for a claim.
If dependant is staying in your household, you can claim up to $7,000 per dependant (or $11,000 for handicapped parents). If dependant is not staying in your household, you can claim up to $4,500 per dependant (or $8,000 for handicapped)
f. Grandparent caregiver relief
This relief is for mother who are working and have engaged their parents/grandparents or in-laws to look after the children. The amount claimable is $3,000 on one parents/grandparents/in-laws.
g. Handicapped brother/sister relief
If your siblings are handicapped and you are supporting them, you can eligible to claim $3,500 for each sibling. (From YA2015, you can claim up to $5,500) Note: If your parents have claimed HCR on your brother/sister, you cannot claim for this relief.
h. CPF Relief
CPF relief is given to encourage individuals to save for their retirement. You can claim on your compulsory employee CPF contribution and any voluntary contributions to your Medisave account. If your employer is in the Auto-Inclusion Scheme then this will be automatically calculated. If not, you will need to claim this yourself. Please note that you can only claim if your employee CPF contributions has not exceeded the Ordinary and Additional Wage Ceiling. OW is currently $5,000 a month. Additional wage refers to annual bonus and leave pay and the formula used to computer AW ceiling for 1 Jan 12 – 31 Dec 13 is $85,000 minus total OW. AW is subject to a cap of $37,000.
For more details on the calculation, refer to IRAS website.
i. Life Insurance Relief
You can claim for this if you have bought insurance for yourself and your wife. If you are a married female and satisfy the various conditions, you can only claim for your own life policies and not your husband’s. The amount claimable is the lower of $5,000 less your CPF Contrition or up to 7% of the insured value. Note: If you contributes more than $5,000 for CPF, you are not eligible for this.
j. Course Fee Relief
The government wants the workforce to be equipped with the necessary skills and encourages individuals to constantly upgrade themselves through course so as to enhance employability. You can claim up to a maximum of $5,500 per year.
k. Foreign Maid Levy Relief
Foreign Maid Levy (FML) relief is given to encourage married women to continue to be in the workforce. Thus, if your household has employed a maid, you are eligible for this levy. You can claim twice the amount of levy on one domestic worker paid in the previous year.
l. CPF Cash Top Up relief
This relief is to encourage individuals to top up their Retirement or Special Account under the CPF Minimum Sum Topping Up Scheme. You are also entitled to the relief if your employer made the top-up for you. You can claim up to a cap of $7,000 for self and an additional $7,000 if you top up the account of your spouse, siblings, parents, grandparents and your in-laws.
m. Supplementary Retirement Scheme (SRS) Relief
If you have contributed to SRS, you can claim the amount up to the maximum cap of SRS contribution of $12,750 if you are a Singaporean/PR or $29,750 if you are a foreigner.
n. NSman (Self/Wife/Parent) Relief
For the guys, here’s another bonus for you if you have completed your national service. The general population can claim up to $3,000 if you have performed NS activities in the preceding years or $1,500 if you haven’t. For key appointment holders, you can claim up to $3,500 and $5,000 respectively.
For the ladies and parents of Neman, you can claim a deduction for $750 for the support you have given to your husband/son.
3. Parenthood Tax Rebate (PTR)
Lastly, you can claim a rebate from your tax payable if you qualify for PTR. This should be differentiated from tax relief which reduce your chargeable income. It is offered to married Singapore tax residents as an incentive to encourage them to have more children. You can claim up to $5,000 for the 1st child, $10,000 for the second and $20,000 for the 3rd and beyond. This amount can be shared between you and your spouse to offset the tax payable.
