Self Employed Tax Question

[lamaray]

Hi all,

I would like to ask, for a self employed person, what do you guys do in order to reduce the tax amount?

Let's assume your trade income for the year is $100K, what do you do?

Pay to cpf?
Donations?

Any other creative methods?

 

[Godmode]

Voluntary CPF contributions for you and also your dependents.
If you bought some machinery including computers etc. can claim 400% PIC.

 

[Slowdown]

If your other half is not working (e.g. homemaker), you can consider splitting your annual income about the two of you. You will enjoy lower tax payable as the reported income will be taxed at a lower bracket. However it also means that your other half may have to contribute to CPF or lose out on other benefits. You may even need to start up a company or something similar. Please read up more. I dun have the details.

No other half? What about parents?

 

[spiderman108]

Voluntary CPF contributions for you and also your dependents.
If you bought some machinery including computers etc. can claim 400% PIC.

What you mean can claim back 400%? I have bought a machinery from Taiwan, can i claim it back?

 

[Godmode]

What you mean can claim back 400%? I have bought a machinery from Taiwan, can i claim it back?

Yes. You need to claim it under production and innovation credit. Either take money back or claim it as tax credit. I believe the tax credit has higher value but if you want cash then go for that option.

I usually claim tax credit.

 

[spiderman108]

Yes. You need to claim it under production and innovation credit. Either take money back or claim it as tax credit. I believe the tax credit has higher value but if you want cash then go for that option.

I usually claim tax credit.

Thanks Godmode for your reply.

I have bought the equipment for almost 100k but my company is not making any money, can i take back cash?

 

[henrylbh]

Thanks Godmode for your reply.

I have bought the equipment for almost 100k but my company is not making any money, can i take back cash?

Yes you can claim cash payout by completing a form. You need to have at least 3 employees whom the company contributes CPF.

 

[spiderman108]

Yes you can claim cash payout by completing a form. You need to have at least 3 employees whom the company contributes CPF.

Thanks henry for your reply but i have no staff and working alone. Am i still qualify to claim it?

 

[kebinu]

Thanks henry for your reply but i have no staff and working alone. Am i still qualify to claim it?

Nope as you don't meet the requirement.

Go check on pic. Go figure out what you need to do the claim and you will gain more instead.

 

[kebinu]

Check up on other income and how it works.

It's better if you have an accountant to advise you.

 

[Godmode]

Thanks henry for your reply but i have no staff and working alone. Am i still qualify to claim it?

I believe PIC can be deferred means you can claim it later in 2014-2015 considering you will be profitable and able to claim this as tax credit. However, you need to check if you can defer 100% or only certain percent as you must claim something for the year and defer the rest.

I suggest you talk to a tax office. Give them a call, they would help you.

 

[limkopilimteh]

What you mean can claim back 400%? I have bought a machinery from Taiwan, can i claim it back?

first - whether the machine qualify for PIC (there is a list of equipment that qualify, not everything can)

second - you have no employees -> cannot claim cash payout

third - you can claim capital allowances on the machinery, e.g. 100% for sure. If the machine falls within the list of equipment, then u can claim 400% on the cost of the machine.

fourth - if the machine is not in the list, you can still appeal to iras. They will approve equipment that increases productivity or innovation.

Lastly, iras is checking on people who anyhow claim. When in doubt, ask the friendly iras officer.

 

[spiderman108]

Hi guys, thanks for all those info and I will check with the iras and account. Anyone have a good account to recommend me. Really appreciate the help. Thanks in advance.