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 between Jan 1 and Dec 31 last year.
The Inland Revenue Authority of Singapore (Iras) is continuously trying 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 because 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 Bicentennial Bonus, a personal income tax rebate of 50 per cent of tax payable (capped at $200) will be granted to all tax resident individuals 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 PORTAL
Use 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 DETAILS
Ensure that the pre-filled information on your tax form such as income, deductions and reliefs are accurate and complete.
Tip: If there are discrepancies, check with the relevant organisation directly. They will resubmit the information to Iras if there are errors.
STEP 4: UPDATE EXISTING TAX RELIEFS
If you have previously claimed reliefs but no longer qualify for them, remove the pre-filled sections before submitting the form.
If you qualify for additional or new reliefs (for example, claim relief for a newborn child), include the claims when you e-file.
STEP 5: DECLARE OTHER SOURCES OF INCOME
If you have received any other income that is not pre-filled, declare it in the appropriate sections on your tax form. This could be "Rent from Property" or "Trade, Business, Profession or Vocation". An acknowledgement page will be displayed after you have successfully e-filed.
What if I hold two jobs?
The gig economy is a growing sector in Singapore. You are considered 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 INFLUENCER
All 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 exceed $100.
PART-TIME PRIVATE HIRE CAR DRIVER
All income received must be reported. As 60 per cent of your driving income can be deducted as expenses, be sure to indicate the right "nature of business " (that is, private hire car/taxi driver) in your tax form.
PART-TIME INSURANCE AGENT
All commission received must be reported. Report your gross commission as revenue. Business-related expenses should be reported separately.
TAX RELIEFS
While some tax reliefs such as Central 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.
Why must I pay tax?
Taxpayers support nation-building when they file and pay their tax on time. The income taxes collected form part of government revenue that goes to fund expenditure 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 enables the Government to use a significant amount to help lower-income Singaporeans by funding social assistance schemes.
Source: This article first appeared in The Sunday Times © Singapore Press Holdings Limited. Permission required for reproduction.
