Despite paying income tax year after year, I draw a blank every time I receive IRAS’s annual reminder to file my taxes. This is followed by a minor panic attack as I try to remember my SingPass password.
This year, the MoneySmart team has put together a simple step-by-step guide to income tax filing for YA2021, so you don’t get lost in the depths of IRAS’ website.
Do you need to file your income tax in 2021?
As long as you earned more than $22,000 in the past Year of Assessment, you’ll need to pay income tax. However, you may or may not need to file your taxes.
If you got a letter or SMS informing you that you’ve been selected for No-Filing Service (NFS), then you do not need to file your income tax.
Instead, your tax bill will be auto-computed based on data submitted by your employer and your previous year’s tax relief claims. You’ll get your bill from April 2021 and you can check/edit it then.
On the other hand, if you’re not selected for NFS, you would have received a “friendly” letter or SMS from IRAS saying you need to file your taxes this year.
You may be asked to file your taxes even if you earned less than $22,000. In that case, you can just declare your income and e-file your tax return, but you won’t be liable to pay income tax.
Didn’t receive anything? Then play safe and file your income tax anyway. Here’s how to do it:
Step 1. Log into IRAS Tax Portal
In order to file your taxes, you’ll need to log into the IRAS Tax Portal using your SingPass.
2FA log-in is now required, so after entering your password you’ll have to enter a passcode sent to your mobile phone via SMS.
Alternatively, download the SingPass Mobile app to log in by scanning a QR code. This is faster than trying to recall your password (those who’ve lost their passwords will know how maddening the password reset process is).
FYI, the old SingPass OneKey Token — similar to an internet banking dongle — will be phased out from 1 Apr 2021.
Step 2. Check your total income for YA2021
Once logged into the system, go to “Individuals” > “Filing Matters” and “File Income Tax Return”.
Here, you’ll be able to check your total income for YA2021 if you’re a salaried employee. This should already be displayed based on your CPF contributions.
If you are partially or fully self-employed, you’ll have to manually enter your income from self-employment. IRAS has a guide for the self-employed here.
Step 3. Declare any additional income
You are technically supposed to declare any income that you have been earning outside of your job. This includes:
- Trade or business income earned (including income in virtual currencies)
- Income received from Government Grants like Jobs Support Scheme, COVID-19-related payouts, Special Employment Credit or Wage Credit Payouts
- Rent from property
- Dividends, gains and interest from certain types of investments (stocks of most companies and REITs resident in Singapore are exempt)
- Payouts from annuities
- Alimony and maintenance payments
- Estate or trust income
Step 4. Check tax reliefs & deductions
In the next section, you can try to reduce the amount of tax payable through tax reliefs and deductions. These include:
- Course Fees Relief – For courses, seminars or conferences leading to an academic, professional or vocational qualification, or that are relevant to your current job or business
- CPF Cash Top Up Relief – For voluntary CPF top-ups for yourself or your family members (Singaporeans and PRs only)
- CPF Relief – Employees and self-employed who have made compulsory and/or voluntary OA/RA/SA/Medisave contributions
- Earned Income Relief – Anyone who earns taxable income from employment, pension or trade/business/professional/vocational activities
- Handicapped Brother/Sister Relief – For supporting a physically or mentally handicapped sibling or sibling-in-law in Singapore
- Life Insurance Relief – For those paying for their own life insurance premiums and who made less than $5,000 in total CPF contributions
- NSman (Self) Relief – For operationally-ready NS men who have completed their full-time NS
- Parent/HandicappedParent Relief – For those supporting parents, grandparents, parents-in-law and grandparents-in-law.
- Supplementary Retirement Scheme (SRS) Relief – For those who are saving via the voluntary SRS Scheme.
Once you enter the necessary details, the system will automatically calculate the amount of tax relief you are entitled to.The tax relief amount will be subtracted from your total taxable income, and the max. tax relief is $80,000.
Since the above tax reliefs are for the previous year, by now it would be too late to qualify for them. However, you can check out the following guide for the next tax season (i.e. your game plan this year).
Step 5. File away!
Once you’ve filled in the above details, check that the tax return is accurate, submit the online form, and you’re done.
Tax filing season is from 1 Mar 2021 to 18 Apr 2021. Make sure to submit it by the 18 Apr 2021 deadline, or you could get slapped with penalties.
Step 6. Check your Notice of Assessment
A few weeks after you file your taxes, you will receive a Notice of Assessment (NOA) i.e. your income tax bill. The NOA indicates how much you have to pay in taxes and the deadline.
This will be sent by post to your home. You can also access a digital copy of your NOA by logging into the IRAS MyTax portal.
Check that the NOA is correct. If you have any concerns, log in to IRAS myTaxPortal and select “Object to Assessment” within 30 days of receiving your NOA. You’ll need to provide supporting evidence, and IRAS will review your objection.
See IRAS’ guide on objecting to your NOA for further details.
Step 7. Pay your income tax
The government wants to make it easy to give them money, so there are many ways you can pay your taxes:
- Internet banking (bill payment)
- Internet banking (fund transfer)
- PayNow QR
- DBS PayLah! Mobile app
- Phone banking
- ATM (DBS/POSB or OCBC only)
- AXS Station
- AXS e-station (internet) or m-station (mobile)
- SAM kiosk
- SAM Web / SAM Mobile
- NETS (at post office only)
- Telegraphic transfer (only if you are overseas and cannot use any of the other payment methods)
Can you use a credit card to pay income tax?
Officially, you can’t use your credit card to pay your income tax. However, a few banks do allow you to make payment indirectly via tax payment facilities. You’ll need to pay a processing fee, but some feel it’s worth it for the miles or rewards points.
Citibank’s PayAll service lets you pay income tax with your Citi credit card. You earn the base earn rate on your card — for example, 1.2 miles per $1 on the Citi PremierMiles card. But you need to pay a service fee of around 2% (varies from customer to customer).
- Local Spend
- S$1 = Up to 1.2 Miles
- All Foreign Currency Spend including Retail and Online
- S$1 = 2 Miles
- Selected Online Hotel Bookings
- S$1 = Up to 10 Miles
Apply and spend $200 to get: $300 Cash PayNow OR Apple Watch SE (worth $419).
Apply and spend $500 to get: $350 Cash PayNow OR Sony WH-1000XM4 (worth $499).
DBS has an Income Tax Payment Plan where you can earn 1.5 miles per $1 while splitting your income tax bill over 12 months at 0% interest. However, there is a processing fee of 2.5%.
- Local Spend
- S$1 = 1.2 Miles
- Overseas Spend
- S$1 = 2 Miles
- Staycation bookings
- S$1 = 10 Miles
HSBC’s Tax Payment Programme allows you to pay your income tax bill in a single payment or in monthly instalments. HSBC offers the lowest processing fee of 0.7%; on the other hand, you only earn 1 reward point per $1.
- S$1= 10 Points
- S$1= 4 Miles
- Min. Spend
Receive a S$10 cash rebate when you spend a min. of $250 at Shell. Valid till 31st of July 2021. T&Cs Apply.
Because of the cost, using your credit card to pay income tax probably only makes sense if you have a very large income tax bill and don’t mind paying to earn some miles or points.
Found this article useful? Share it with anyone who’s puzzled about income tax.