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Income Tax Filing 2018 – Everything You Need to Know About Tax Deductions and e-Filing

singapore income tax filing season 2018

Mark Cheng

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Maybe it’s your first year of work, or maybe you have filed your income tax several times before. Many will agree that no matter how many times you have been through Singapore tax season, it always seems to be more daunting than it actually turns out to be.

Individual Income Tax filing happens annually from 1 March to 18th April (for e-Filing). Citizens, PRs and foreigners are subjected to the same tiered system, but there are tax deductions available and you should know what you qualify for, either for this year or the years to come. This year, the Inland Revenue Authority of Singapore (IRAS) has also introduced some new features to make income tax filing much easier, but we’ll get to that later.

Whilst most of the filing is usually done at the IRAS myTax portal, have a good look at what the Government has structured in IRAS’ full list of tax deductions in Singapore. Reducing your taxable income is a very satisfying sensation, and we recommend you know what you are entitled to (within legal boundaries of course).

But before we get to that, here’s a quick summary of what you need to know for Individual Income Tax Filing 2018:

 

guide to tax season 2018 income tax filing

Contents

 

New Initiatives for Income Tax Filing 2018

Instant Notice of Assessment (NOA)

Some 200,000 taxpayers with an assessable income of $100,000 or less will receive their finalised tax bill (NOA) the moment they file their tax returns this year. This is very different from the previous practice where you would have to wait till June onwards to receive your tax bill after filing your taxes. The even better news is that IRAS plans to scale up this service initiative progressively.

 

Preview NOA for Taxpayers on No-Filing Service (NFS)

For those taxpayers who are on the NFS, they can preview their tax bill at the myTax portal from March 2018. There are currently about 1.5 million, or 2 in 3, taxpayers who are on this service and won’t be required to file a tax return this year.

If there are no changes to the pre-filled income and relief claims, NFS taxpayers can request for an early assessment and the tax bill will be available at myTax Portal by the next working day. Which is great if… you are really that kan cheong to pay your taxes.

 

Pre-filling of self-employed income for Grab and Uber drivers

This new initiative is huge, and definitely a sign of how the gig economy has changed significantly in Singapore. In this pilot implementation, Grab and Uber drivers were invited to participate in the scheme through the Grab and Uber platforms. Some 9,000 drivers have opted to participate this year and they will enjoy the convenience of having their income and commission fees pre-filled by IRAS in their electronic tax returns, making the tax filing process simpler for them.

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Income Tax Deductions

There is a whole list of things that you can get tax deductions, or reliefs, for. Some tax reliefs apply to individuals and some apply to families. It’s good to note that a lot of these reliefs are automatically included in your NOA, but there are some that aren’t.

Take Note:

  • Tax reliefs either need to be included in your form manually by you, or are auto included based on other records.
  • Personal income tax reliefs cap at $80,000 per year

Here are some key tax reliefs you should know about:

 

Course Fees Tax Relief

This is a pretty sweet tax relief that you can get if you are a Singapore Tax Resident and have taken on a course, seminar or conference that is meant to upgrade your skills at work and enhance your employability in the workforce.

There are some conditions to qualify such as the course needing to result in a professional or academic qualification, and no, your wine tasting class isn’t on the list. You can claim the actual course fees incurred by yourself up to a maximum of $5,500 each year regardless of the number of courses, seminars or conferences you have attended.

You can claim only the portion of course fees which you paid. Any amount paid or reimbursed by your employer or any other organisation cannot be claimed.

You may claim the following types of fees:

  • Aptitude test fees (for computer courses);
  • Examination fees;
  • Registration or enrolment fees; and/or
  • Tuition fees.

You can fill up your deductibles under “Section 4 – Deductions, Reliefs and Parenthood Tax Rebates” and select “Course Fees”.

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CPF Cash Top-up Relief

Why would anyone want to TOP UP their CPF contribution, which is already a forced 20% of your income every month you say? Well, some of us may feel it’s worth storing more money in your CPF Special Account on top of your monthly contribution as it prepares you for retirement.

This relief also encourages the topping up of family members’ accounts as well, and both actions get you tax reliefs. Do note that this relief is only for cash top ups and it doesn’t count if you transfer funds from your own CPF account to your family members’ accounts for example.

You can enjoy a maximum relief per year up to $14,000 ($7000 for your own top up, $7000 for topping up a family member’s account)

 

CPF Cash Top Up Relief Summary

 

Amount of Cash Top-up to own or family members’ CPF Special/Retirement Account (does not exceed the limit on cash top-up amount for computing tax relief)

 

Amount of Relief

Below $7,000 Exact amount of cash top-up
$7,000 or more $7,000

 

Limit on Cash Top-Up Amount for Computing Tax Relief

Limit on cash top-up amount for computing tax relief
For recipients below age 55 Current Full Retirement Sum (FRS)  – Special Account (SA) savings  – Net SA savings withdrawn under CPF Investment Scheme (CPFIS) for investments that have not been completely disposed off
For recipients aged 55 years and above Current Full Retirement Sum (FRS) –  Retirement Account (RA) savings*

 

*RA savings refers to the cash set aside in the RA (excluding amounts such as interest earned, any government grants received) plus amounts withdrawn.

Find it automatically listed under Section 4 when you Go to Individuals > “File Form B/B1” (Updated by CPF)

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SRS Contribution Relief

Yet another relief to encourage additional savings for retirement. If you started an Supplementary Savings Account with one of the 3 local banks (DBS, OCBC, UOB), you will also qualify for tax reliefs on the amounts you have saved there.

There are some decent benefits to starting an SRS account other than tax relief, such as being able to invest the money saved there into things like REITS, ETFs or unit trusts. The investment gains you make there are non-taxable but have to go back into the SRS account of course.

You are entitled to a SRS tax relief in the Year of Assessment (YA) following the year of contribution. However, you have to be assessed as a tax resident for that YA. Non-residents are not eligible for any tax relief. You can get a maximum relief of up to $15,300 each year.

 

Yearly Maximum SRS Contribution by Singapore Citizens / SPRs

Year Absolute Income Base* Yearly Maximum SRS Contribution
2011 to 2015
(i.e. YAs 2012 to 2016)
$85,000
(17 months x $5,000)
$12,750
(15% of $85,000)
2016 onwards

(i.e. YA 2017 onwards)

(17 months x $6,000) = $102,000 15% of Absolute Income Base (15% x $102,000) = $15,300 

Find it automatically listed under Section 4 (Updated by the bank you choose)

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Tax Reliefs for Families

Apart from the tax reliefs mentioned above, there are also a number of reliefs that families can enjoy as well. Here are two quick summaries from IRAS:

income tax parent relief 2018

For married couples, there are quite a number of tax deductions that you should definitely know about as well. Here’s two quick summaries that you should take note of:

income tax savings for married couples

 

 income tax child related reliefs

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A quick reminder – File your taxes early from 1 Mar to 18 Apr 2018 to avoid late filing penalties

Do file your taxes early in March 2018 at myTax Portal to avoid the last-minute rush or late filing penalties. You can now file your taxes on-the-go via your smartphone anytime, anywhere. For more information on income tax filing matters, visit www.iras.gov.sg/irashome/TaxSeason2018/.

You can also stay up-to-date by following IRAS on www.facebook.com/irassg or www.twitter.com/iras_sg.

For tax filing assistance, you can contact IRAS through the following channels:

  • AskJamie, your virtual assistant on tax filing matters
  • Email via myTax Mail service (at mytax.iras.gov.sg)
  • Call them at 1800 356 8300 or chat with them online (from Mondays to Fridays, 8am to 5pm)

If you need any assistance to file your tax return, please get ready your SingPass 2FA and make an appointment with IRAS at least 2 working days in advance for a shorter wait.

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Mark Cheng

I rant and rave a lot, but when I'm not busy doing that, I'm managing the content for MoneySmart. I love Singapore, but I also believe in helping it to improve bit by bit, and that's where MoneySmart comes in. Have some thoughts? Drop me an email at [email protected]