Do I need to pay tax?
Ask yourself
Do you earn, derive or receive income in Singapore?
Did you earn $22,000 or more last year?
If your answer to both is YES, then YOU NEED to pay tax.
What constitutes as earn, derive or receive?
You work in Singapore
You do business in Singapore eg. Freelancers, Taxi Drivers, Commision agents, etc.
You have investments in Singapore
You work outside Singapore
incidental to your Singapore employment
behalf of the Singapore Government
receive income through partnership
Other income - NSman, part-time, royalty, pension, Supplementary Retirement Scheme withdrawals
Income
Taxable Income
Employment income
Salaries
Rental income
Bonuses
Director’s Fee
Withdrawal from SRS
Self-employment income from Trade, Business, Profession or Vocation
Non-Taxable Income
Capital gains from stocks and property investments
Winnings from 4D, TOTO, horse betting and soccer betting
Pensions
CPF life payouts
Do I need to declare my income when I file income tax?
You do not need to declare if your employer participates in the auto inclusion scheme (AIS) for your employment income. If not, you would have received an IR8A form from your employer. You have to declare your income (including bonuses).
What if I have a side business eg. Freelancer, hawker, taxi driver, tuition teacher, etc
You also need to include your business income when you file your tax.
Expenses
Working from Home Expenses
You can now file your Working from Home Expenses. The amount you can claim is the increment from your previous water and electricity bill for each month. If you have 2 people who work from home, you need to divide the increment according.
Example 1:
Apr 2020: $170
May 2020: $250
Increment: $250 - $170 = $80
Expense to declare: $80/2 pax = $40 for thr month of May
For Self-Employed
Keep a record of your expenses and declare accordingly.
It is important to keep track of them!
Employee Expenses
If you have expenses from my employment that is not reimbursed eg. cab fare, you can file them as well.
Rental Expenses
You can file rental expenses if you spent money on the property that you rent out. This is for the owner and not the tenant!
Donations
You can file donations and get a 2.5x tax deduction!! just remember to donate to approved Institutions of Public Character (IPCs)
Reliefs & Rebates
Reliefs
- subtracted from your taxable income to reduce your chargeable income
- the maximum reliefs you can claim is $80,000
Rebates
- subtracted from your income tax bill
- currently only parenthood tax rebate
Life Insurance
Did you know that Even getting life insurance (not accident or health) would help reduce your tax? But do take note that if your CPF contribution is more than $5000, you can't claim! Hence, if you are a self-employed or foreigner this benefit you more!
CPF Top-Ups (OA, SA & MA)
You can top up your or your loved ones CPF. You can get up to a total of $14,000 relief just by topping up $7000 (self) + $7000 (loved ones).
You can top up Medisave too. But it depends on CPF contribution limits. eg. annual contribution cap (37% of your income or $37,740).
Course
You can only claim up to $5,500 for course fees. It should lead to a recognised academic and professional qualification.
SRS Contribution
You can open up an SRS accounts with any of the local banks and you can enjoy dollar for dollar tax relief. However, you are unable to withdraw the money until the statutory retirement age. Speak to your consultant for more info!
Dependents
If your parents are above 55 years old, you can claim $5,500 (not staying with you) or $9,000 (staying with you).
If your dependent is physically or mentally disabled, you can claim $10,000 (not staying with you) or $14,000 (staying with you).
Qualifying Child Relief
You and your partner can claim qualifying child relief of $4,000 per child or $7,500 if handicapped.
Parenthood Tax Rebate
You can also claim parenthood tax rebate (offset tax payable):
1st child $5000
2nd child $10000
3rd onwards $20000
Working Mother's Child Reliefs
You will enjoy working mother's child reliefs of
1st child 15%
2nd child 20%
3rd onwards 25%
of income.
Grandparent Caregiver Relief
If your parents help take care of your kids, you can claim grandparent caregiver relief of $3000!
NSMan Relief
If you performed ns activities in the preceding year you can get $3,000 relief (general population)or $5,000 (NS key command and staff). If not its $1,500 relief (general population) or $3,500 (NS k.ey command and staff)
NSMan Wife Relief
The amount of relief you can claim under NSman wife relief is $750.
Foreign Domestic Worker Levy Relief
With a maid, you can also receive Foreign Domestic Worker Levy relief!
You may claim twice the total foreign domestic worker levy paid in the previous year on one foreign domestic worker.
Earned Income Relief
You will get earned income relief as well depending on your age.
Below 55 $1000
55 to 59 $6000
60 & Above $8000
if you are handicapped
Below 55 $4000
55 to 59 $10000
60 & Above $12000
Happy filing!!
Deadline is 18 March 2021
Assessable Income
= total income - allowable expenses - approved donations
Chargable Income
= assessable income - personal reliefs
Tax Rates
Case Study
Tom is 38 years old.
He earns an annual income of $80,000.
He rents out his property which brings him an income of $800/month.
He also donates $300/month to an approved IPC.
His mum is age 78 are not staying with him.
He, however, has 2 young children.
He served his national service and did not hold any key roles. he also attended in-camp training.
He also has life insurance premiums of $3,600/year.
Lastly, he paid a concessionary foreign domestic worker levy of $60/month last year.
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