Once again it is the time of the year when the taxman comes calling. And DollarsAndSense.sg wants you to be adequately prepared – you may refer to a comprehensive checklist that we have provided for YA2013 for an introduction to Singapore Income Tax.
First of all, you have to determine if you are a tax resident or non-resident for income tax purposes. For more information about whether you are a tax resident, please visit here. Singaporeans can choose to be assessed as a resident if he exercises employment outside Singapore for more than 6 months in a calendar year.
For YA2014, the deadlines for filing taxes are 15 Apr 2014 by paper form and 18 Apr 2014 by e-Filing.
This article will focus on the common concerns of an average Singaporean is when filing for tax.
Bonus
Unless your bonus is contractual, it will only be taxable on the date it is paid out.
For example:
1. Contractual bonus (13th month) that was received on Feb 2014 for your services provided from 01 Jan 2013 to 31 Dec 2013.
This contractual bonus is taxable in YA 2014 as the bonus is legal binding for your services in 2013.
2. Performance bonus that the company has the discretion to determine the amount. Employer informs employee on 15 Dec 2013 of the company’s decision to pay performance bonus for the services provided from 01 Jan 2013 to 31 Dec 2013 on 31 Mar 2014.
This performance bonus is taxable in YA 2015 as the employee is only entitled to the performance bonus on 31 Mar 2014 when the bonus is paid.
Overtime (OT) payments
If at this stage, you’re wondering whether your OT pay is taxable? The answer is none other than… Yes, your OT pay is taxable and it comes under the Employment income in your income tax computation.
The IRAS website has an extensive list of tax deductions and reliefs, if you want to know every single thing there is we advise you visit that website because just replicating what they have there would be pointless and not add any value for our readers. For the purpose of this article, we would like to look at some of the reliefs that may be overlooked when we file our taxes.
Spouse relief
As mentioned in IRAS website, spouse relief is intended to support family formation and provide recognition to both male and female taxpayers who supported their spouses.
You may claim this relief if your spouse does not have an annual income of exceeding $4,000 in the previous year. The income criterion does not apply for handicapped spouse.
$2,000 for Spouse Relief; or $3,500 for Handicapped Spouse Relief
Parent/handicapped parent relief
Individuals can claim this relief which promotes filial piety and provide recognition to those who are supporting their parents in Singapore. All conditions must be satisfied and IRAS website has updated the changes from YA 2015 onwards for the quantum of the relief and the new apportionment for sharing of parent relief.
Course fee relief
Any course fees paid, up to maximum of $5,500 can be claimed for YA 2014 if criteria are met according to IRAS. Deferment of course fee relief is allowed which depends on situations and scenarios have been provided in the IRAS website.
For example, I am able to claim course fee relief incurred for my Foundation Programme for Singapore QP, which is an accounting course that was not reimbursed by my current employer.
Still need help?
If after going through the list of tax deductions, navigating through the forms or myTaxPortal, you still require further assistance you should always seek help from IRAS.
You can always do a quick computation of your income tax by using the income tax calculator provided by IRAS. As some of the reliefs are computed by IRAS if you are a salaried employee and your employer will be submitting employment income details to IRAS under the Auto-Inclusion Scheme (AIS) for Employment Income.
We will like to stress that it is the taxpayer responsibility to make sure that there is no understatement of your taxable income and tax evasion is a very serious offence in Singapore.
We hope you enjoyed this article. Do share with us and let us know if there is anything on individual tax you will like to know more about!