The tax filing season is here again. All of us would have received an SMS from IRAS that we need to fill our tax by 15 April for paper filing and 18 April for e-filing. As our income goes up, tax can be quite a significant amount in the thousands. Just to give an example, a person whose take home pay is $3500 plus 3 months of bonus will end up paying $1425 in tax. We can actually reduce our tax by knowing the different reliefs which we may be eligible for. Let’s explore the different reliefs in this article. You may not even know some of these reliefs existed.
Course Fees Relief
Those who have studied courses or part time diploma/university courses while working, you are actually able to claim course fee relief on the course fees you paid. The course fees claimable is the actual course fees incurred by yourself up to a maximum of $5500 each year regardless of the number of courses, seminars or conferences you have attended. You can claim only the portion of course fees which you paid. Any amount paid or reimbursed by your employer or any other organisation cannot be claimed.
There are a few criteria to meet for the course fees relief according to the IRAS website:
- Any course, seminar or conference you attended in 2017 leading to an approved academic, professional or vocation qualification
- Any course, seminar or conference you attended in 2017 that is relevant to your current employment, trade, business, profession or vocation; or
- Any course, seminar or conference that you completed between 1 Jan 2015 to 31 Dec 2016 which is relevant to your new employment, trade, business, profession or vocation in 2017
- Courses, seminars or conferences for recreational or leisure purposes;
- Courses, seminars and conferences for general skills or knowledge (e.g. Internet surfing course, social media skills, basic website building skills and Microsoft Office skills); and
- Courses, seminars and conferences to acquire skills or knowledge for a hobby instead of your profession (e.g. photography, language and sports courses).
- Polytechnic/University courses if graduates have never exercised any employment or carried on any trade, profession or vocation previously.
CPF Cash Top-up Relief
A popular tax relief is the CPF Cash top up relief. If you top up your own CPF Special Account or CPF retirement account in CASH, you are eligible for up to $7000 tax relief per year. An additional $7000 tax relief is applicable if you also top up your family member’s CPF special/retirement account.
Examples of family members are:
- Parents or Parents-in-law;
- Grandparents or Grandparents-in-law;
- Spouse; and/or
For example, if John tops up $7000 cash to his CPF special/retirement account and also tops up another $7000 cash to his spouse or parents CPF special/retirement account, he will get a total of $14000 tax rebate for the year.
A point to take note is there are income threshold for top up of CPF for spouse/siblings. To claim tax relief for cash top-ups for your spouse or siblings, the spouse or siblings must not have an annual income exceeding $4,000 in the year preceding the year of top-up. Annual income includes taxable income (e.g. trade, employment and rental), tax exempt income (e.g. bank interest, dividends and pension) and foreign-sourced income regardless of whether it has been remitted to Singapore. This income threshold does not apply to parents, grandparents, handicapped* spouse or handicapped* siblings.
There are other limits which can be quite confusing to explain in this blog post. You can refer to IRAS page here for the detailed information. Anyway, you do not need to manually claim for this tax relief. The relief is granted automatically to those who are eligible based on records sent to IRAS by the CPF Board.
Parent Relief / Handicapped Parent Relief
If any of your parent is not working and is 55 years old and above in 2017 or is handicapped, you can claim tax relief also. If your parent is totally not working and does not have any form of income, you can claim $9000 per parent if they stay with you. If they do not stay with you, you can still claim this relief but it will be $5500. Do note that if they do not stay with you, you must have incurred $2,000 or more in supporting him/her in that year to be eligible for the relief.
The family members whom you can claim for this relief includes:
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