tax question for this year

[swanpeach]

hi

Lowering your tax for 2021,

Hi, lets say. i have a total pay of 110000 this year before cpf deduction
i am a Singaporean,

I am planning to donate some cash to some charity org,
i read for every 1 dollar we donate to a ipc charity org. we can minus off 2.50 from our tax the next year

so my questions is

1:what is the max i can contribute?
2:what would my tax deductible be on my salary of 110000 ? per annum,
and what kind of money am i saving if i can max it out?
do u hve tips as well?

 

[yusoffb01]

isnt it cheaper to just pay the tax?

donate $1, lose $1 but save $2.50x11.5%= $0.28

 

[limster]

My tip is to just keep it simple and donate 10% of your salary. Whether 10% of take home or gross, it's up to you

 

[swanpeach]

i dont get this calculation ?

why do u x 11.5 ??
i thought fo example,

u donate 1000 - then.

LESS: Approved Donations. - will be 2.5k
so total salary will minus off 2,5 k??
and then continue with other relieves?

isnt it cheaper to just pay the tax?

donate $1, lose $1 but save $2.50x11.5%= $0.28

 

[swanpeach]

why can i know?

why can i know ???

My tip is to just keep it simple and donate 10% of your salary. Whether 10% of take home or gross, it's up to you

 

[Trazora]

why do u x 11.5 ??
i thought fo example,

u donate 1000 - then.

LESS: Approved Donations. - will be 2.5k
so total salary will minus off 2,5 k??
and then continue with other relieves?

11.5% tax tier for income amounts in the $80k to $120k range

https://www.iras.gov.sg/irashome/Individuals/Locals/Working-Out-Your-Taxes/Income-Tax-Rates/

when donate $1000, $1000 come out of your pocket but you save only 1000×2.5×11.5% = $287.50 tax. End up nett $712.50 came put of your pocket.

 

[TiedInsurer]

hi

Lowering your tax for 2021,

Hi, lets say. i have a total pay of 110000 this year before cpf deduction
i am a Singaporean,

I am planning to donate some cash to some charity org,
i read for every 1 dollar we donate to a ipc charity org. we can minus off 2.50 from our tax the next year

so my questions is

1:what is the max i can contribute?
2:what would my tax deductible be on my salary of 110000 ? per annum,
and what kind of money am i saving if i can max it out?
do u hve tips as well?

You're misunderstanding something here. When you hear about rich billionaires avoiding taxes by donating to charities, they donate to charities they OWN. If you're not rich enough to have a charity with your name on it, you can't game the system by being a philanthropist.

Random article on how the game is played: https://www.nytimes.com/2018/08/03/business/donor-advised-funds-tech-tax.html

For the average joe, donating to charities will always mean having less money than you start with.

 

[Prof. Utonium]

No max.

Depends on your deductible.

I donate a lump sum at the end of the year, as above poster mentioned do it out of goodwill not trying to game the system.

Current income is still low to think about benefitting from it.

 

[Dividends]

hi

Lowering your tax for 2021,

Hi, lets say. i have a total pay of 110000 this year before cpf deduction
i am a Singaporean,

I am planning to donate some cash to some charity org,
i read for every 1 dollar we donate to a ipc charity org. we can minus off 2.50 from our tax the next year

so my questions is

1:what is the max i can contribute?
2:what would my tax deductible be on my salary of 110000 ? per annum,
and what kind of money am i saving if i can max it out?
do u hve tips as well?

There isn't a max amount you can donate, however, the personal income tax relief cap of $80k still applies.

If your only reason to donate to charity is to reduce your taxes, you're better off just paying the tax. My advice would be to look into CPF or SRS topups if you just want to reduce your taxes, at the cost of locking up your money of course.

 

[swanpeach]

Thx. i donate alot for animals + animals shelters for many years already , but none of them are tax deductible,
i am just trying to lower my taxes for now that is why,

 

[BBCWatcher]

There isn't a max amount you can donate, however, the personal income tax relief cap of $80k still applies.

Or you manage to fall into the 0% tax bracket, whichever comes first. But if you're starting at $110K before tax reliefs then it looks like the $80K annual tax relief limit would come before falling into the 0% tax bracket.

Let's suppose this worker barely hits the CPF Annual Limit ($37,740) and thus qualifies for $20,400 of tax relief from compulsory CPF contributions. (I'm assuming this worker is in the 37% CPF age band.) There's also a $1,000 Earned Income Relief that practically everyone gets. Let's assume no children and no other tax reliefs (no voluntary CPF contributions with tax relief, no SRS account contributions). That'd mean $21,400 of total tax reliefs so far, leaving $58,600 of remaining tax relief below the $80,000 limit. With a 2.5X multiplier that'd mean a maximum charitable contribution of $23,440 to claim the $58,600 of remaining tax relief in full.

Adjust the math for your particular circumstances, but that's the basic idea.

 

[Okenba]

Rstu 7k to your SA.
Rstu 7k to your siblings, parents, spouse SA/RA. Assuming they are not earning income.
Top up 15.3k to your SRS.

Are the usual ways to lower tax while keeping the money still yours, though there is some reduction in liquidity.

 

[Cobra!]

There isn't a max amount you can donate, however, the personal income tax relief cap of $80k still applies.

If your only reason to donate to charity is to reduce your taxes, you're better off just paying the tax. My advice would be to look into CPF or SRS topups if you just want to reduce your taxes, at the cost of locking up your money of course.

donations are not reliefs.

 

[Dividends]

donations are not reliefs.

Did some reading and yes, you're right. I believe donations do not count under the Personal Income Tax Relief Cap.

 

[elf108]

Donate for good cause.
Tax deductible is just nice to have.

 

[reddevil0728]

If you are talking about the effective amount you can keep in cash, I don't think by donating to reduce your tax, will actually increase the cash you can keep.