Sunday, March 17, 2019 | The Sunday Times | B19

Lorna Tan

Invest Editor

It’s that time of the year again when individual taxpayers have to buckle down to file their tax returns with that April deadline looming ever larger – April 15 for paper filing and April 18 for electronic forms.

The process is quite simple on the surface – just declare your taxable income for Year of Assessment 2019 based on what you earned be-tween Jan 1 and Dec 31 last year.

The Inland Revenue Authority of Singapore (Iras) is continuously try-ing to make the experience more user-friendly by simplifying tax rules and the processes for filing and payment.

It is no wonder that 97 per cent of taxpayers e-file their tax returns be-cause it is easy and convenient.

Still, filing might be an arduous task, particularly if you are doing it for the first time. The Sunday Times highlights how a new taxpayer can file and reduce his tax returns.

But before you even start, there is some good news: As part of the Bi-centennial Bonus, a personal in-come tax rebate of 50 per cent of tax payable (capped at $200) will be granted to all tax resident indi-viduals for income earned last year.

Steps to Tax Filing

STEP 1: HAVE THESE DOCUMENTS READY • Form IR8A (if your employer is

not participating in the Auto-Inclusion Scheme);

• Particulars of your dependants (for example, child, parent) for new relief claims;

• Details of rental income from your property and other income, if any; and

• Business registration number of sole proprietorship/partnership (for self-employed and partners only).

STEP 2: LOG IN TO MYTAX PORTALUse your SingPass to log in and click on “Individuals”/“File Form B/B1”. This electronic tax form will take just five to 10 minutes to complete.

STEP 3: VERIFY YOUR DETAILSEnsure that the pre-filled informa-tion on your tax form such as in-come, deductions and reliefs are ac-curate and complete.

Tip: If there are discrepancies, check with the relevant organisa-tion directly. They will resubmit the information to Iras if there are errors.

STEP 4: UPDATEEXISTING TAX RELIEFSIf you have previously claimed re-liefs but no longer qualify for them, remove the pre-filled sections be-fore submitting the form.

If you qualify for additional or new reliefs (for example, claim re-lief for a newborn child), include the claims when you e-file.

STEP 5: DECLARE OTHER SOURCES OF INCOME

If you have received any other in-come that is not pre-filled, declare it in the appropriate sections on your tax form. This could be “Rent from Property” or “Trade, Business, Pro-fession or Vocation”. An acknowl-edgement page will be displayed af-ter you have successfully e-filed.

What if I hold two jobs?The gig economy is a growing sec-tor in Singapore. You are consid-ered a self-employed person with the additional income you earned last year from your part-time job or a side gig on top of your day job. Here is a snapshot of additional tax-filing tips relating to step 5 above.

SOCIAL MEDIA INFLUENCERAll income and benefits received must be reported unless the benefit received is given on an ad hoc basis or for a one-off consumption, and the value of the benefit does not ex-ceed $100.

PART-TIME PRIVATE HIRECAR DRIVERAll income received must be re-ported. As 60 per cent of your driv-ing income can be deducted as ex-penses, be sure to indicate the right “nature of business” (that is, pri-vate hire car/taxi driver) in your tax form.

PART-TIME INSURANCE AGENTAll commission received must be re-ported. Report your gross commis-sion as revenue. Business-related expenses should be reported sepa-rately.

Tax ReliefsWhile some tax reliefs such as Cen-tral Provident Fund (CPF) cash top-ups are automatically granted, some will require your action. Here is a snapshot of some of the reliefs and rebates you may be eligible for.

TAX RELIEFS AUTOMATICALLY GRANTED TO YOU

Earned Income Relief: The objec-tive is to recognise the employed and those carrying on a trade, busi-ness, profession or vocation. The amount is $1,000 for employed indi-viduals below age 55 as of Dec 31 last year. For those aged 55 to 59, the re-lief amount is $6,000 while it is $8,000 for those aged 60 and above.

NSman Relief: This relief recog-nises contributions of eligible opera-tionally ready national servicemen (NSmen) in the previous work year. The amount of relief is dependent on whether you are a key or non-key appointment holder and an active or inactive NSman. The amount ranges between $1,500 and $5,000.

CPF Relief: This encourages individ-uals to save up for their retirement. The amount of relief is capped at the maximum amount of compul-sory CPF contributions at $20,400 (based on both Ordinary and Addi-tional Wage Ceilings).

Relief for a self-employed person is capped at the lower of (i) 37 per cent of your net trade income (ii) CPF cap of $37,740 or (iii) the ac-tual amount contributed by you.

If your employer is not registered under the Auto-Inclusion Scheme

for Employment Income, this relief will not be automatically granted.

For self-employed persons, this re-lief will be automatically allowed based on Medisave and voluntary CPF contributions paid to the CPF

Board in the previous calendar year.

Voluntary Contributions to CPF Medisave Account: This aims to en-courage individuals to save up for their medical needs.

The amount of relief is the actual amount of voluntary contributions you made to your Medisave ac-count in the previous calendar year, subject to the CPF annual limit of $37,740. If the CPF annual limit is reached, no further voluntary con-tributions to your Medisave ac-count can be made. You must have earned income when you made vol-untary contributions to your Medis-ave accounts in the previous calen-dar year.

CPF Cash Top-Up Relief: This en-courages individuals to save up for their retirement and that of their de-pendants. The amount of relief is up to $7,000 for topping up your own CPF Special or Retirement Ac-count in cash.

There is an additional relief amount of up to $7,000 for topping up the CPF Special or Retirement Account of your family members in cash. If it is for your spouse or sib-lings, their annual income must not exceed $4,000 in the previous cal-endar year. And you must hold a Sin-gapore NRIC.

Relief for Contributions under the Supplementary Retirement Scheme (SRS): This relief aims to encourage individuals to save up for retirement in addition to their CPF contributions.

The amount of relief will be capped at the maximum amount of SRS contributions for each calen-dar year. For Singapore citizens and permanent residents, the amount is $15,300 and $35,700 for foreigners.

Tax reliefs you have to claim

PARENT RELIEF This serves to promote filial piety and it provides recognition to indi-viduals supporting their parents, grandparents, parents-in-law or grandparents-in-law in Singapore.

If they are living with you, the amount of relief is $9,000. It will be $14,000 if the dependant is a handi-capped parent living with you. If the dependants are not living with you, the amount of relief is $5,500. The amount is $10,000 if the depen-dant is a handicapped parent who is not living with you.

Note that your parents/grandpar-ents should be living in Singapore last year. They should be aged 55 years and above in 2018 (unless they are handicapped). In addition, their annual income should not ex-ceed $4,000 in 2018 (does not ap-ply if they are handicapped).

You may claim for up to a maxi-mum of two dependants. If the de-pendant is not living with you, you should have incurred at least $2,000 in costs in maintaining him or her. If more than one individual is support-ing the same dependant, the relief can be shared between claimants based on an agreed apportionment.

HANDICAPPED SIBLING RELIEF This relief recognises individuals supporting their handicapped sib-lings or siblings-in-law.

The amount of the relief is $5,500. Your sibling must be living with you. If he is not, you must have incurred at least $2,000 in main-taining him or her.

When you claim handicapped sib-ling relief, no one else is allowed to claim Spouse or Child relief on the dependant.

LIFE INSURANCE RELIEFThis applies to individuals who did not contribute, or contributed less than $5,000, to their CPF or Medis-ave in the previous calendar year.

The amount of relief, capped at $5,000, is the lower of (a) the differ-ence between $5,000 and your to-tal contribution to CPF or Medis-ave, or (b) the amount of insurance premiums paid on your own or your spouse’s life insurance policy or (c) 7 per cent of the insured value.

COURSE FEES RELIEFThe aim is to encourage individuals to continuously upgrade them-selves so as to enhance their life-long employability.

The amount of relief is up to $5,500. You must have attended a course, seminar or conference that relates to your business or profes-sion, or for the purpose of gaining an approved academic, profes-sional or vocational qualification. In addition, the course fees should not have been paid or reimbursed by your employer or any other or-ganisations.

lornatan@sph.com.sg

If you have been informed by the Inland Revenue Authority of Singapore (Iras) via a letter, form or SMS to file your tax return, you must do so by April 18.

It does not matter how much you earned last year or whether your employer has electronically submitted your salary informa-tion to the taxman.

If you have been informed of your eligibility for Iras’ No-Filing Service (NFS), you are not re-quired to file a tax return. No ac-tion is required unless you have other sources of income to de-clare, like rental income. Your in-come, however, is still subject to tax.

Do note that being on the NFS for one year does not mean you will be on it for the next.

If you are not sure whether you are on the NFS this year, go to my-tax.iras.gov.sg and click “View Filing Status” to check whether you are on it.

If you have not been contacted by Iras, you must file tax returns under one of two scenarios:

• Your annual income (from employment, rental, business, etc) exceeds $22,000 last year.

• You are self-employed with an annual net business income exceeding $6,000 in 2018. This is because self-employed persons are required to make compulsory contributions to their Central Provident Fund Medisave accounts if their net trade income is more than $6,000 for the year.

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Taxpayers support nation-build-ing when they file and pay their tax on time.

The income taxes collected form part of government reve- nue that goes to fund expendi-ture for Singapore.

This includes the building of infrastructure like schools,

roads, hospitals, MRT lines and other public facilities, as well as providing subsidies for health, housing and education.

The money collected also en-ables the Government to use a sig-nificant amount to help lower- income Singaporeans by funding social assistance schemes.

Newbie’s guide to filing annual tax returns

To file or not to file

Me & My Money

Why must I pay tax?

The annual tax returns filing season ends on April 18. The first of our two-part series on personal income tax returns can take some of the sting out of the process.

How much income tax must I pay?

First 20,000 Next 10,000

First 30,000 Next 10,000

First 40,000 Next 40,000

First 80,000 Next 40,000

First 120,000 Next 40,000

First 160,000 Next 40,000

First 200,000 Next 40,000

First 240,000 Next 40,000

First 280,000 Next 40,000

First 320,000 In excess of 320,000

Chargeable income($)

Income tax rate (%)

Gross tax payable ($)

0 2

- 3.5

- 7

- 11.5

- 15

- 18

- 19

- 19.5

- 20

-

22

0 200

200 350

550 2,800

3,350 4,600

7,950 6,000

13,950 7,200

21,150 7,600

28,750 7,800

36,550 8,000

44,550

Source: IRAS SUNDAY TIMES GRAPHICS

NOTE: In Singapore, our personal income tax rates are progressive. This means that higher income earners pay a proportionately higher tax, with the highest personal income tax rate set at 22%. The above income tax rates apply for Singapore citizens or Singapore permanent residents.

For instance, if you earned $35,000 less tax reliefs and deductions last year, your tax would work out to be $375 ($200 + ($5,000 x 3.5%)). Given the recently announced 50% personal income tax rebate (capped at $200), your net tax payable would be $187.50 (50% of $375).

DID YOU KNOW?

TOP 5 RELIEFS CLAIMED BY TAX-PAYING INDIVIDUALS IN YA2017

AVERAGE INDIVIDUAL INCOME TAX PAID BY EACH TAXPAYER IN DIFFERENT INCOME BAND FOR YA2017

9 out of 10taxpayers �led on time in FY2017

average reliefs claimed by individuals in YA2017

$14,781

more than 97%of taxpayers e-�led in FY2017

$

CPF

Child

Earned income

$13.2b

$5.7b

$3.1b

$1.7b

$1.0b

Parent

SupplementaryRetirement

Scheme

0

-100

100

200

300

400

>25-25

>30-40

>25-30

>40-50

>60-70

>80-100

DIFFERENT INCOME BANDS BY ASSESSED INCOME ($’000)

>150-200

>300-400

>50-60

>70-80

>100-150

>200-300

>500-1,000

>400-500

>1,000

$’000$384,388