IRAS subsidy

[kurt_629]

had been paying the income tax for the last couple of years, was thinking is there any additional subsidy/grants that we could use.

charity, i think they actually allow grant subsidy on the amount that you donated, the amount x 2 times.

upgrading courses, max $3k

Insurance, max $5k but sooner or later, could no longer enjoy as the cpf contribution exceeds 5k

parent - taken
spouse - no relief
handi - none
NS - auto and only left 2 more years of ICT.

What else could i tap onto?

 

[mummy1234]

had been paying the income tax for the last couple of years, was thinking is there any additional subsidy/grants that we could use.

charity, i think they actually allow grant subsidy on the amount that you donated, the amount x 2 times.

upgrading courses, max $3k

Insurance, max $5k but sooner or later, could no longer enjoy as the cpf contribution exceeds 5k

parent - taken
spouse - no relief
handi - none
NS - auto and only left 2 more years of ICT.

What else could i tap onto?

You could contribute to SRS. That is $12k+ deduction.

Also can contribute to your parents cpf. Just take it that you are giving them allowance through this. The last time I did it 2 years ago, they pay my mum about $300 every month so I topped up $3600 for her as part of allowance for a year.

 

[kurt_629]

You could contribute to SRS. That is $12k+ deduction.

Also can contribute to your parents cpf. Just take it that you are giving them allowance through this. The last time I did it 2 years ago, they pay my mum about $300 every month so I topped up $3600 for her as part of allowance for a year.

SRS, could you share with me how it actually works in a nutshell?

was told by my colleague, that you could actually deposit up to 10K which this actually work like a retirement plan.
Apart from that, you also get tax relief.
While the money inside SRS, you could actually utilize for stock/investment

 

[lzydata]

IRAS: Filing tax: Deductions to save tax (expenses, donations, reliefs...)

The current tax deduction for charitable contributions is 250% of the donated amount. This is up to 31 Dec 2015, and may be extended.

For SRS, you can start with MOF's guide:

Ministry of Finance - Supplementary Retirement Scheme (SRS)

 

[denn23]

You could contribute to SRS. That is $12k+ deduction.

Also can contribute to your parents cpf. Just take it that you are giving them allowance through this. The last time I did it 2 years ago, they pay my mum about $300 every month so I topped up $3600 for her as part of allowance for a year.

contribute to parents... interesting.

Do you know if i can claim for CFA exam?

thx

 

[NiteX2]

contribute to parents... interesting.

Do you know if i can claim for CFA exam?

thx

Yes, if it's related to your job or advancement

 

[LiteHouse]

SRS only makes sense if u are a high earner.

 

[icicic]

SRS, could you share with me how it actually works in a nutshell?

was told by my colleague, that you could actually deposit up to 10K which this actually work like a retirement plan.
Apart from that, you also get tax relief.
While the money inside SRS, you could actually utilize for stock/investment

Buy stock using cash, capital gains is not taxable. Neither are dividends. If you buy using srsthe withdrawal amount is taxable so , depends on how much you withdraw potentially the capital gains taxable. Lose your problem, win govt takes a cut...

 

[beri stupid idiot]

Buy stock using cash, capital gains is not taxable. Neither are dividends. If you buy using srsthe withdrawal amount is taxable so , depends on how much you withdraw potentially the capital gains taxable. Lose your problem, win govt takes a cut...

life is like tat ...

 

[anfielder]

Buy stock using cash, capital gains is not taxable. Neither are dividends. If you buy using srsthe withdrawal amount is taxable so , depends on how much you withdraw potentially the capital gains taxable. Lose your problem, win govt takes a cut...

Right off the bat you avoid paying taxes on the srs amount, allowing the compounding effect to work for you. And only half the withdrawal amount is taxable. Anyway you can stagger the withdrawal amount to minimize taxes. It's actually a very good deal.

 

[MoDiE]

get married have a baby.. the best..

spouse relief if spouse not working is 2000

child relief is 4000

then got parent hood tax rebate.. 5000 rebate.. so for the next 2 or 3 years will be $0 income tax for me. if have second child, ptr another 10k.. and 3rd child onwards, additional 20k each child. so for someone with 3 children, ptr is 5k + 10k + 20k = 35k.. almost like 15-20 years no need pay tax depending on how much you earn.. lol

 

[anfielder]

get married have a baby.. the best..

spouse relief if spouse not working is 2000

child relief is 4000

then got parent hood tax rebate.. 5000 rebate.. so for the next 2 or 3 years will be $0 income tax for me. if have second child, ptr another 10k.. and 3rd child onwards, additional 20k each child. so for someone with 3 children, ptr is 5k + 10k + 20k = 35k.. almost like 15-20 years no need pay tax depending on how much you earn.. lol

But the cost of bringing up a child is much more than the tax saved leh.. have a child because you want to not because you want to save on tax

 

[MoDiE]

But the cost of bringing up a child is much more than the tax saved leh.. have a child because you want to not because you want to save on tax

rather give to me own flesh and blood then donate to blood suckers

 

[babyrobo]

curious how does the contribution to parents work and how do they draw out? tks!

 

[mummy1234]

curious how does the contribution to parents work and how do they draw out? tks!

There is a topping up of parents cpf scheme which you can use to claim relief. They give about $300 per month to the parents bank account from their cpf which you have topped up. So you can treat it us giving them their allowance.

 

[mummy1234]

get married have a baby.. the best..

spouse relief if spouse not working is 2000

child relief is 4000

then got parent hood tax rebate.. 5000 rebate.. so for the next 2 or 3 years will be $0 income tax for me. if have second child, ptr another 10k.. and 3rd child onwards, additional 20k each child. so for someone with 3 children, ptr is 5k + 10k + 20k = 35k.. almost like 15-20 years no need pay tax depending on how much you earn.. lol

Agree that having a child is great for tax savings. I have 2 children and the tax relief means I do not have to pay tax for many years.

 

[lzydata]

Buy stock using cash, capital gains is not taxable. Neither are dividends. If you buy using srsthe withdrawal amount is taxable so , depends on how much you withdraw potentially the capital gains taxable. Lose your problem, win govt takes a cut...

Sigh this comes up so often that I can't be bothered to explain it again, so see the MOF FAQ or the SRS thread. There is no difference in capital gains treatment between investing with cash and investing with SRS, even before we consider the half-amount-taxable and other factors.

 

[MoDiE]

Agree that having a child is great for tax savings. I have 2 children and the tax relief means I do not have to pay tax for many years.

its rebate, not relief... there is a big big difference between rebate and relief...

 

[lingua101]

SRS only makes sense if u are a high earner.

Not necessary. If by contributing to SRS, it can bring your taxable income to the lower band, then it will be worthed.

Here is the example.

If after all the allowable deduction, your taxable income is $45,000.
If you do not contribute SRS, you will have to pay tax:
550 + 7% x (5,000) = $900

If you contibute full SRS (12,750), you are lowering your taxble income to $32,250. Hence your income tax fall into the lower band, hence you will only pay
200 + 3.5% x (2,250) = $278.75

Hence you save $621.25, which means 4.87% return


Actually the optimize SRS contribution in this case should be just $5,000
Hence you will only pay $550 tax instead of $900, while only contributing $5000
ROR = 350/5000 = 7%

Of course the higher your income band, the higher the return.

In my opinion, if you can't bring down your tax band by 1 level, not worth to contribute as the money will get lock up for long time... (unless if you are cash rich of course)

 

[icicic]

Sigh this comes up so often that I can't be bothered to explain it again, so see the MOF FAQ or the SRS thread. There is no difference in capital gains treatment between investing with cash and investing with SRS, even before we consider the half-amount-taxable and other factors.

Actually i did read it, that "no difference" relies on some major assumptions like same income bracket. Srs booklet point 75 admits as much by dodging the question on tax of srs savings withdrawals.