Tax season is around the corner. Here are some ways to maximize your Tax Reliefs:
You may claim the actual course fees incurred by yourself, up to a maximum of $5,500 each year
If your CPF contribution is < $5,000 last year, you may claim the lower of:
a. the difference between $5,000 and your CPF contribution; or
b. up to 7% of the insured value of your own/your wife's life, or the amount of insurance premiums paid
New! The voluntary cash contribution to your Medisave account is not considered for the $5,000 limit for the total CPF contribution for YA 2023 onwards.
You may claim this relief if you have supported the following dependants:
• Parents / Parents-in-law / Grandparents / Grandparents-in-law
• Stay with dependent $9,000 / Don’t stay with dependent $5,500
You may also discuss with your siblings on how to share the parents relief.
For parents, you may claim tax relief of $4,000 per child.
Tip! Depending on your income, it may be better for QCR to be claimed under fathers, as mothers have Working Mother Child Relief
For working mothers, you may claim up to 60% of your income depending on the number of children as below, and your child did not have an annual income exceeding $4,000.
Tip! If your child worked part-time before tertiary education, your WMCR will be automatically removed.
But you may write to IRAS to request to re-instate the WMCR once your child is back to full-time studies.
Budget 2023: Child relief for working mothers to be fixed from 2024
Tip! When claiming reliefs, if you are aware that you have exceeded the relief cap of $80,000, you may consider giving up certain reliefs (e.g. Qualifying Child Relief, Parent Relief and Grandparent Caregiver Relief) and let others (e.g. your spouse, your siblings) claim the reliefs
Donations to approved Institution of a Public Character (IPC) enjoy tax deductions of 2.5 times the qualifying donation amount.
For employees: Yearly CPF top-up $8,000
You can enjoy tax relief of up to $16,000 for cash top-ups made in each calendar year. Get up to $8,000 tax relief when you top up for yourself and up to $8,000 when you help your loved ones build their retirement savings.
For self-employed: Max contribution $37,740
You may contribute the maximum CPF contribution of $37,740 to reduce your taxable income
Tip!
You should top up as early as possible to benefit from the power of compound interest over the years.
You can also earn more interest if you top up earlier in the year. For example, if you top up in January each year instead of in December, you can earn up to 20% more interest on your top-ups in 10 years!
Similarly, contributions to SRS can be made in the earlier part of the year, so that the funds can be invested earlier in the year to participate in equity markets or other insurance plans.
Maximum tax relief: $15,300 (Singaporeans/PR) & $35,700 (foreigners)
Read more on IRAS tax relief & deductions here!
Hope that the above information is useful!
If you are still unsure about the tax reliefs or have any queries, do email me at winniechan@fapl.sg and we can have a chat to see how best to reduce your tax payable.
Meanwhile, you can watch my latest video on Tiktok @ SquirrelFinance on How to Save Tax
Important: The information and opinions in this article are for general information purposes only. They should not be relied on as professional financial advice. Readers should seek independent financial advice that is customised to their specific financial objectives, situations & needs. This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.
Winnie Chan is a distinguished Certified Financial Planner (CFP) with over a decade of expertise in financial advisory services. Her commitment to her clients has led many to achieve their financial aspirations while ensuring their families’ protection. Winnie‘s extensive experience in insurance claims has been instrumental in securing successful payouts, providing crucial financial relief during challenging times.
Her passion for community engagement is evident through her financial education initiatives. She has conducted insightful financial talks for esteemed organizations such as Carousell Group, Singapore National Eye Centre and Singtel, empowering their employees with valuable financial knowledge.
Outside of her professional commitments, Winnie balances her life with a passion for fitness and music. She enjoys rigorous workouts at the gym and is a pianist, currently pursuing Grade 6 ABRSM.
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By submitting this form, I confirm that
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In compliance with the Personal Data Protection Act, Financial Alliance Pte Ltd (“FAPL”) seek your consent to collect and use your personal data (e.g. name, NRIC, contact numbers, mailing addresses, email addresses and photograph) for the purposes of and in accordance with FAPL’s Data Protection Policy, which can be found on FAPL’s website at https://fa.com.sg/data-protection-policy/.
根据《个人数据保护法》,鑫盟理财私人有限公司征求您的同意向您收集并使用您的个人信息。鑫盟理财将根据公司的个人数据保护政策所阐述的用途使用您的个人资料(例如姓名,证件号码,联系电话,邮寄地址,电邮地址和照片)。 该政策可在本公司网站上查寻,网址为 https://fa.com.sg/data-protection-policy/.
By submitting this form, you are deemed to have read and understood FAPL’s Personal Data Policy.
提交此表格,即表示您已阅读并理解鑫盟理财私人有限公司的个人数据政策