The time has come again to file your
individual income tax returns – and the April 18 deadline is
just around the corner. That said, under the No-Filing Service
(NFS), many taxpayers have been informed that they are not required
to file a tax return.
However, that does not mean you are not
required to pay any taxes. It simply means that your tax bill will
be computed automatically based on your auto-included income
(submitted by your employer) and previous year’s relief claims,
which may be adjusted if you do not meet the eligibility
criteria.
With that, I believe that one should always
file your own taxes to take advantage of potential tax savings.
Here are a few tips on how you can reduce your income taxes
legally.
1) Claims
from your day job
One often overlooked tax relief is the
employment expenses incurred in earning your salary. In layman
terms, you are eligible for deductions if you have used your own
money to pay for expenses essential to your employment such as
travel expenses, entertainment expense, subscriptions, etc.
Some examples given by IRAS include:
Another important note is that you would have
to keep proper records of the expenses incurred for a period of
five years. These records must be supported with invoices,
receipts, vouchers, and other documents.
2)
Grandparent Caregiver Relief
Many people are aware about the common
Parents’ relief or the Working mother’s child relief (WMCR).
However, a quick check with my friends with kids reveals that they
are unfamiliar with the Grandparent Caregiver Relief (GCR), often
due to a lack of understanding of how it works.
The GCR is granted to working mothers who
engage the help of their parents, grandparents, parents-in-law or
grandparents-in-laws (including those of ex-spouses) to take care
of their children. You can read more about it here.
And there is more: Assuming your mother is a
housewife who helps to take care of your children, you are able to
claim both Parent Relief and GCR on
your mother if you meet the qualifying conditions.
3) Tap on
the various Child Reliefs
Many government schemes, such as the Baby
Bonus and childcare subsidies, are available to help parents defray
the high costs of bringing up kids in Singapore. On top of that,
parents can also tap into the various tax reliefs meant for
families supporting their children, like the parenthood tax rebate
and working mother’s child relief.
That said, one of the more overlooked tax
schemes is probably the Qualifying Child Relief (QCR). Let me show
you why.
Many parents harbour the notion that they are
not entitled for the Qualifying Child Relief once their kids cross
the 16-years-old boundary or start working part-time. That is not
true! According to IRAS, having an unmarried child who is studying
full-time at any educational institution and who does not have an
annual income exceeding S$4,000 in the taxation year, qualifies you
to claim the QCR. This means that you are eligible for the relief
even if your kid is 24 years old studying in University or even
working part-time for some pocket money (but not exceeding 4
grand). For more information, you can visit the link here.
4) Course
Fees Relief
Last but not least, don’t forget to seize the
course fees’ relief if you have been upgrading your skills or
furthering your studies. You can defray all the related costs like
the examination fees and tuition fees, too.
However, one has to note that courses which do
not enhance your employability are not eligible for any relief.
This includes programmes taken for leisure purposes or general
skills, such as photography, basic computer courses, etc. It also
doesn’t apply to those who are studying and have not worked
previously.
Conclusion
The few tips mentioned above are not
exhaustive. In fact, it would be wise for you to visit the IRAS
website for a whole list of other reliefs to reduce your personal
income taxes.
Don’t forget to file your taxes before April
18!
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