TIME TO PAY YOUR TAXES!

It is the time of the year again to file my income tax for working year 2007.
Just got my IR8A,
and I got a shock of my life when I discovered that my chargeable income is so high, especially with all the bonuses and benefits which I was ever happy to receive.

Here is a useful site for those who need a low-down of what they are gonna be in for:
http://www.iras.gov.sg/irasHome/page01.aspx?id=86

If you are like me, an employed Singaporean and earning more than S$20,000 in 2007,
time to pay your taxes!

What is taxable?
All forms of income including earned bonuses and monetary benefits.
more info here: http://www.iras.gov.sg/irasHome/page.aspx?id=108

What are deductables or reliefs?
These are deductions that can help you lower the amount taxable.
more info here: http://www.iras.gov.sg/irasHome/page.aspx?id=110
Some important deductables to help you:

• Donations of any kind:
  If you have donated to charity or any association of any kind, it is deductable. Yes I do!
  more info here: http://www.iras.gov.sg/irasHome/page03.aspx?id=1546
• CPF Contributions:
  If you have contributed to CPF (that is a silly question!), this is the biggest chunk of the relief.
  more info here: http://www.iras.gov.sg/irasHome/page03.aspx?id=198
• Earned Income Relief:
  "'Earned income relief' is a relief to provide recognition for individuals who receive income from work, trade, business, profession or vocation." A great statement! I'm below 55 and healthy, so I rejoice I get S$1,000 relief for this component! Woohoo!
  more info here: http://www.iras.gov.sg/irasHome/page03.aspx?id=200
• Parenthood Tax Rebate (PTR):
  If you have more than one child, you get rebates! I am not even married! Not applicable!
  more info here: http://www.iras.gov.sg/irasHome/page03.aspx?id=1528
• NSman Relief:
  Having served for 2 and 1/2 years and attended in-camp training, I deserve a S$3,000 rebate. I wished I was a key appointment holder (KAH).
  more info here: http://www.iras.gov.sg/irasHome/page03.aspx?id=210
• Life Insurance Relief:
  This may help those who have bought life insurances and have less than S$5,000 in employee CPF contribution.
  more info here: http://www.iras.gov.sg/irasHome/page03.aspx?id=208
• One-off personal tax rebate:
  According to the Budget 2008 Clause 4.81, all tax payers are getting a 20% rebate off the 'Tax Payable after tax credit and other reliefs’, up to a cap of S$2,000.
  This is useful!
  more info here: http://www.iras.gov.sg/irasHome/page03.aspx?id=6670
• Parent/Handicapped Parent Relief:
  There has been changes from the previous year. Note that those with parents above 55 years of age and earn less than S$2,000 in 2007, are eligible for deductions up to S$5,000! It sure helps a big deal!
  more info here: http://www.iras.gov.sg/irasHome/page03.aspx?id=212

How do work out the taxable amount?
Basically the formula is:
1. Total Income Earned - Deductables/Reliefs = Chargeable Income
2. Chargeable Income are charged accordingly:
First $20,000: 0% + Next $10,000: 3.5%
First $30,000: as before + Next $10,000: 5.5%
etc...
refer to rates here: http://www.iras.gov.sg/irasHome/page03.aspx?id=1190

Example
If your chargeable income for YA 2007 is $36,000 (i.e. you earned $36,000 in year 2006), your tax payable would be calculated as below:
First $30,000 = $350
Next $6,000 @ 5.5% = $330
Total tax payable = $350 + $330 = S$680

Otherwise, this useful Tax Calculator works the math for you!
http://www.iras.gov.sg/irasHome/uploadedFiles/Quick_Links/e-Tax_Guides/Individuals_and_employees/How-to-calculate-your-tax.xls
Just remember to input as Gross Income, and put in deductions: CPF Contributions Relief, Earned Income Relief, One-off personal tax rebate and etc...
Have fun filing your tax!