Tax relief

[xorionn]

Is it better to just put 15.3k into SRS or together do some more topup CPF?

 

[Value.Matrix]

Is it better to just put 15.3k into SRS or together do some more topup CPF?

For tax relief, your annual assessable income should be minimum more than 40k (at 7% income tax bracket) before ir makes sense.

Your question is too vague, but my rule of the thumb is if you are at 11.5% tax bracket, just contribute till you lower to 7%. 11.5% tax relief savings is too attractive imho.

 

[articland05]

I'm 15.3k poorer nao
sobs

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[xorionn]

would u also top up ur cpf medisave or SA?

 

[articland05]

would u also top up ur cpf medisave or SA?

I also top up 7k to SA
so shld be 22.3k poorer

sobs sobs

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[xorionn]

I also top up 7k to SA
so shld be 22.3k poorer

sobs sobs

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SA and not MA?

 

[hlw8888]

top up MA or SA better?

 

[BBCWatcher]

top up MA or SA better?

If you can do both with tax relief, great, but I prefer prioritizing MA top ups with tax relief for the following reasons:

1. MA dollars can be useful at any/every age, not just for yourself but for your loved ones;

2. Once your MA reaches the Basic Healthcare Sum (BHS), the "spillover" contributory rules are often helpful;

3. It becomes harder to squeeze in MA top ups with tax relief as you progress through your career (and hopefully get salary increases, promotions, and bigger bonuses) since MA top ups must fit within both the BHS and the CPF Annual Limit.

 

[hlw8888]

If you can do both with tax relief, great, but I prefer prioritizing MA top ups with tax relief for the following reasons:

1. MA dollars can be useful at any/every age, not just for yourself but for your loved ones;

2. Once your MA reaches the Basic Healthcare Sum (BHS), the "spillover" contributory rules are often helpful;

3. It becomes harder to squeeze in MA top ups with tax relief as you progress through your career (and hopefully get salary increases, promotions, and bigger bonuses) since MA top ups must fit within both the BHS and the CPF Annual Limit.

thks for the info. i dun think i am able to top up both or even top up 7k into either one for any tax relief. (my tax bracket still low)

i juz my SA/MA to grow abit more.

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[articland05]

SA and not MA?

yeah. SA. my MA this yr alrdy reach ceiling.
can only top up after 1 Jan 2.8k

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[articland05]

qns: after 1 Jan 2020 if I top up 2.8k for MA and 7k for SA, will I be entitled to a total of 9.8k of tax relief for 2021?

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[SBC]

qns: after 1 Jan 2020 if I top up 2.8k for MA and 7k for SA, will I be entitled to a total of 9.8k of tax relief for 2021?

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You will get tax deductible of 9.8k for 2021 assessment.

 

[articland05]

You will get tax deductible of 9.8k for 2021 assessment.

oh. that's nice...
thanks

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[endlssorrow]

What’s the MA basic sum to meet?

If you can do both with tax relief, great, but I prefer prioritizing MA top ups with tax relief for the following reasons:

1. MA dollars can be useful at any/every age, not just for yourself but for your loved ones;

2. Once your MA reaches the Basic Healthcare Sum (BHS), the "spillover" contributory rules are often helpful;

3. It becomes harder to squeeze in MA top ups with tax relief as you progress through your career (and hopefully get salary increases, promotions, and bigger bonuses) since MA top ups must fit within both the BHS and the CPF Annual Limit.

 

[bright_84]

What’s the MA basic sum to meet?

Check CPF website ba. Information there is updated.

 

[BBCWatcher]

What’s the MA basic sum to meet?

There's no requirement to meet the Basic Healthcare Sum. You simply cannot exceed the BHS with voluntary MA top ups, that's all.

The 2019 BHS is $57,200, and for 2020 it's $60,000.

 

[Value.Matrix]

You will get tax deductible of 9.8k for 2021 assessment.

Bro you mean tax relief right?

When you say tax deductible, you mean my tax is 10k. I get tax deductible of 9.8k, so i pay $200 or you mean

Based on income tax rate, the % tax i can save is based on 9.8k X % tax?

Just to be clear because i didnt thought of saying it as tax deductible and only use tax relief.

 

[w1rbelw1nd]

For tax relief, your annual assessable income should be minimum more than 40k (at 7% income tax bracket) before ir makes sense.

Your question is too vague, but my rule of the thumb is if you are at 11.5% tax bracket, just contribute till you lower to 7%. 11.5% tax relief savings is too attractive imho.

Actually, Endowus came up with a fairly interesting way of doing it in one of their recent articles. They looked at the 3 matrices of SRS top up and concluded that even at 7% tax bracket, under most scenarios (based on a reasonable 7% return), it is good to top up your SRS account.

 

[Value.Matrix]

Actually, Endowus came up with a fairly interesting way of doing it in one of their recent articles. They looked at the 3 matrices of SRS top up and concluded that even at 7% tax bracket, under most scenarios (based on a reasonable 7% return), it is good to top up your SRS account.

Its pushing too near the limit for 7% tax. Why do i say so?

For 7% to become 22% (had you invested), it takes about 27 years invested at 4% to become 22%. Hence why i think 11.5% tax savings is more helpful. Tax relief comes either in SRS, or CPF SA. So thats what i see.

 

[Jazzbie]

It's quite a personal thing actually - when you start to feel the pain of tax, you will want to do something to reduce it. For me it was 11.5%. Maybe it is the double digit effect.