WEBVTT - Ways to reduce your personal income tax 0:00:00.009 --> 0:00:02.309 You're listening to AC N A podcast. 0:00:05.150 --> 0:00:09.909 Welcome back to your favorite financial podcast, Money Talks. This 0:00:09.920 --> 0:00:12.409 is Andrea Heng and I'm about to take you through 0:00:12.420 --> 0:00:16.459 yet another episode to help you be smarter with your money. 0:00:16.889 --> 0:00:19.680 I've been adulting for some time now. You know, moving 0:00:19.690 --> 0:00:25.059 from single to married and boy have my financial priorities 0:00:25.069 --> 0:00:29.850 and movements changed. If you're still a swinging single, you 0:00:29.860 --> 0:00:31.860 can go listen to the episode that we had with 0:00:31.870 --> 0:00:36.209 tiktok Sensations. The wee blinks, they actually gave some pretty 0:00:36.220 --> 0:00:40.240 nifty tricks on how to spend and save wisely as 0:00:40.250 --> 0:00:40.990 a single. 0:00:41.360 --> 0:00:44.439 If you're in a relationship or you're married. There's a 0:00:44.450 --> 0:00:48.610 special series as well by my colleague Elizabeth Neo. Check out, 0:00:48.619 --> 0:00:52.479 am I adulting? Right? It sits exclusively in the Money 0:00:52.490 --> 0:00:55.919 Talk Stable and there are some great real life experiences 0:00:55.930 --> 0:00:58.939 and examples there. So, you know, you're not alone in 0:00:58.950 --> 0:01:01.169 your financial journey. We will never leave you alone. 0:01:01.569 --> 0:01:06.039 Now, today's episode doesn't discriminate, it affects everyone because we 0:01:06.050 --> 0:01:10.319 all have to pay our taxes. Now, I know tax 0:01:10.330 --> 0:01:13.830 season isn't for another few months, but as we collect 0:01:13.839 --> 0:01:16.690 our year end bonuses, we cash out our gains for 0:01:16.699 --> 0:01:19.429 the year. It's as good a time as any to 0:01:19.440 --> 0:01:22.789 calculate how much we should put aside. Ok. 0:01:23.190 --> 0:01:25.529 It never hurts to be a bit Kia. So here 0:01:25.540 --> 0:01:29.209 and plan ahead and know how much you can actually 0:01:29.220 --> 0:01:34.620 save on taxes. Yep. That's right. You can save on taxes. 0:01:34.629 --> 0:01:38.519 It's something that I'm only just learning about and I'm 0:01:38.529 --> 0:01:41.489 getting the help of one man who managed to get 0:01:41.500 --> 0:01:45.190 thousands of dollars in tax deductions. Talk about the ultimate 0:01:45.199 --> 0:01:48.330 life tag, right? Let's wait no longer and get him 0:01:48.339 --> 0:01:50.569 to talk to us. His name is Josh Tan, 0:01:50.809 --> 0:01:53.940 better known as the astute parent on youtube. He's also 0:01:53.949 --> 0:01:58.150 a financial advisor. Welcome to Money Talks. Josh, thank you. 0:01:58.160 --> 0:02:00.620 It's great to be here. It's great to have you. 0:02:00.629 --> 0:02:03.129 I'm so glad you carved out the time to talk 0:02:03.139 --> 0:02:05.910 to us about this. So I saw your video on 0:02:05.919 --> 0:02:09.179 youtube on how you managed to get tax deductions to 0:02:09.190 --> 0:02:16.059 the tune of $90,000. No offense. But please tell me 0:02:16.070 --> 0:02:18.710 this is a Clickbait. Is it really possible? 0:02:19.619 --> 0:02:23.050 You know, the only thing that's a certainty is death 0:02:23.059 --> 0:02:26.460 and taxes, right? So we should always start off on 0:02:26.470 --> 0:02:30.160 the ground because as you earn more, you naturally see 0:02:30.169 --> 0:02:31.720 a bigger and bigger tax bill. 0:02:32.440 --> 0:02:36.008 So this whole concept of getting more reliefs, getting more 0:02:36.020 --> 0:02:38.779 deductions away from your tax view will definitely impact your 0:02:38.788 --> 0:02:42.210 wallet at the on the day. So 90,000 of course, 0:02:42.220 --> 0:02:46.089 comes with certain donations and hopefully everyone listening in is 0:02:46.100 --> 0:02:48.448 inspired to donate a bit more, but there's actually a 0:02:48.460 --> 0:02:50.690 relief cap that maybe we will touch on in a 0:02:50.699 --> 0:02:52.610 quick while. We will indeed. 0:02:52.720 --> 0:02:57.139 Ok. So on average, how much time do you actually 0:02:57.149 --> 0:03:02.330 spend every single year? Right. Working out all these taxes, 0:03:02.339 --> 0:03:05.630 the reliefs that you can claim that you're eligible for. 0:03:05.639 --> 0:03:08.789 More importantly, how much time do you spend sitting there 0:03:08.800 --> 0:03:12.850 connecting all the dots? I think for someone who 0:03:13.288 --> 0:03:16.990 hasn't looked at taxes too much, usually it's too busy. 0:03:17.339 --> 0:03:20.288 They are employee is going to do it. Partner is 0:03:20.300 --> 0:03:22.109 going to do it right. Someone's going to do it 0:03:22.119 --> 0:03:24.839 for me. Yeah. So that's one of equation. So I 0:03:24.850 --> 0:03:27.789 don't always look at my tax bill, but end of 0:03:27.800 --> 0:03:29.330 the year, I think this is a fantastic time to 0:03:29.339 --> 0:03:31.509 bring it up because everything that you like to 0:03:31.604 --> 0:03:34.255 clock for your relief, you have to do it by 0:03:34.264 --> 0:03:37.824 31st of December. So the IRS knows it's within this 0:03:37.835 --> 0:03:41.044 financial year. See, it's very important this timing. So you 0:03:41.054 --> 0:03:44.095 don't actually sit down on like, ok, maybe not on 0:03:44.104 --> 0:03:49.255 31st December, but maybe in November sometime you start sitting 0:03:49.264 --> 0:03:49.785 down 0:03:50.360 --> 0:03:52.330 and you look, do you really sit down and like 0:03:52.339 --> 0:03:55.360 at the table with all your receipts, all your donations made, 0:03:55.369 --> 0:03:57.740 everything that you're eligible for is ok. I'm eligible for 0:03:57.750 --> 0:03:59.199 that and that, do you actually sit down and do 0:03:59.210 --> 0:04:03.500 that or actually for myself? I work with clients. And 0:04:03.509 --> 0:04:06.419 what I do is I schedule calls back to them 0:04:06.570 --> 0:04:09.729 in November and in December, some of them may be 0:04:09.740 --> 0:04:12.300 traveling December. I'll give a call to them in November, 0:04:12.309 --> 0:04:15.899 vice versa. So year end is a period last quarter already. 0:04:16.230 --> 0:04:18.289 So this is time to dig up everything. Have you 0:04:18.299 --> 0:04:19.519 made contributions? 0:04:19.890 --> 0:04:21.670 Are there still gaps that you can fill in to 0:04:21.678 --> 0:04:24.279 get more reliefs? Because any other day, like what I mentioned, 0:04:24.339 --> 0:04:26.410 you're going to save on money and that is a 0:04:26.420 --> 0:04:30.170 definite plus. Yeah, indeed. Ok. So talk to us about 0:04:30.178 --> 0:04:34.690 the in a very basic way, the concept of tax claims. 0:04:34.760 --> 0:04:38.869 I mean, there's things like deductions, there's reliefs, there's rebates, 0:04:39.010 --> 0:04:41.700 help us sort of filter all of that and tell 0:04:41.709 --> 0:04:44.869 us what tax claims really are. That's a good question. 0:04:45.450 --> 0:04:48.570 What many have assumed is that the employer will be 0:04:48.579 --> 0:04:51.269 in charge of filing all these reliefs maybe for someone 0:04:51.279 --> 0:04:54.130 who is the first year in workforce, they've heard of stories, 0:04:54.140 --> 0:04:56.380 employers going to file it, but employer is only in 0:04:56.390 --> 0:04:59.980 charge of sending in what you've actually earned, right? So 0:04:59.988 --> 0:05:02.959 on your own, you have to add in other forms 0:05:02.970 --> 0:05:07.029 of relief that you are actually qualifying for. So on 0:05:07.040 --> 0:05:09.959 that front, how I usually suggest is there are some 0:05:09.970 --> 0:05:11.859 things that are automatically given. 0:05:11.950 --> 0:05:14.489 For example, if you contribute the SRS account, which is 0:05:14.500 --> 0:05:18.709 supplementary scheme that itself will be automatically sent in by 0:05:18.720 --> 0:05:21.368 the bank, right? If you contribute the CPF we do 0:05:21.380 --> 0:05:24.440 top ups. They are eligible. They will automatically be contributed, 0:05:24.660 --> 0:05:27.179 submitted by CPF. But there are other parts that you 0:05:27.190 --> 0:05:30.950 can put in like cost fees. They are eligible course fee. Yeah, 0:05:30.959 --> 0:05:34.029 there are certain things that they are within it cost fees, 0:05:34.040 --> 0:05:37.779 parent relief, parent relief. I've heard of. Yes. Ok. Those 0:05:37.790 --> 0:05:38.450 are things that 0:05:38.880 --> 0:05:42.390 sometimes if you don't pay attention, you are actually missing 0:05:42.399 --> 0:05:44.820 out on. I give you an example. Sure. I've actually 0:05:44.829 --> 0:05:48.859 seen before a recent case on actually grandparent relief. Also 0:05:48.910 --> 0:05:55.140 there's also grand grandparent relief. So what I question that 0:05:55.149 --> 0:05:57.959 person say, why are you claiming this is there 0:05:58.109 --> 0:06:01.570 because she's actually reached that relief cap ready, right? And 0:06:01.579 --> 0:06:04.469 maybe let's share it is 80,000 relief cap. Sure. And 0:06:04.480 --> 0:06:08.250 we'll get to high 90,000. Sure. Yes, please. So for 0:06:08.260 --> 0:06:11.609 this case, I was asking her, isn't this grandparents relief 0:06:11.619 --> 0:06:14.678 wasted if it was fault in your case, because some 0:06:14.690 --> 0:06:17.209 other grandchild would be eligible to claim it, right? 0:06:17.540 --> 0:06:20.829 So in that instance, understanding whether you have reached a 0:06:20.839 --> 0:06:23.350 cap or passing that really to someone else, if you 0:06:23.359 --> 0:06:26.000 have a sibling or there's earning way more than you, 0:06:26.079 --> 0:06:29.119 maybe as a family, you're better off passing away that 0:06:29.130 --> 0:06:32.440 parents lie to them, right? So these are decisions that 0:06:32.640 --> 0:06:34.988 if you look through and you are willing to cooper 0:06:35.040 --> 0:06:38.000 with your family, see how you can optimize it as 0:06:38.010 --> 0:06:40.730 a family. Why there are actually steps that you can 0:06:40.809 --> 0:06:43.649 change and optimize. That's really interesting. I didn't think of 0:06:43.660 --> 0:06:45.890 it that way because you don't realize there's a cap 0:06:45.899 --> 0:06:47.880 to things which we'll get into a little later in 0:06:47.890 --> 0:06:50.480 the conversation. So, as you said, right. Rightfully. So you're 0:06:50.488 --> 0:06:54.619 a salaried employee, your income tax is what typically 0:06:54.709 --> 0:06:58.309 gets automatically computed for you. As you said, you have 0:06:58.320 --> 0:07:02.130 to sort of figure out manually what else you are 0:07:02.140 --> 0:07:05.970 eligible for. So, how do you go about filing these 0:07:05.980 --> 0:07:10.089 manual claims and for relief? Just to be a back story. Sure, 0:07:10.230 --> 0:07:13.170 I studied accounting. Ok. Most of my friends went to 0:07:13.179 --> 0:07:16.540 audit someone to Texas, look at where you are, 0:07:17.559 --> 0:07:21.269 you're still talking about money. So I went to the sales, 0:07:21.279 --> 0:07:24.239 I went to self employed and in self employed, we 0:07:24.250 --> 0:07:27.709 have to file our net profit. So it's slightly different, right? 0:07:27.720 --> 0:07:30.299 Whereas if you are salaried automatically, what you've earned is 0:07:30.309 --> 0:07:35.220 fully calculated. So for self employed, which includes hawkers, taxi drivers, 0:07:35.350 --> 0:07:37.760 you name it, the filing of the net profit still 0:07:37.769 --> 0:07:40.549 needs to be imputed, right manually. So there are expenses 0:07:40.559 --> 0:07:42.709 that are eligible, right? That is a big topic. 0:07:42.805 --> 0:07:45.066 Yes. If we go into that space, it is going 0:07:45.075 --> 0:07:47.466 to take a while, but always look to go with 0:07:47.476 --> 0:07:51.476 the framework. What is claimable and deduct the way to 0:07:51.485 --> 0:07:54.536 file your actual net profit? Then from there, you would 0:07:54.545 --> 0:07:58.316 see your deductibles coming in to reduce that chargeable income, 0:07:58.876 --> 0:08:01.825 which is ultimately what you're gonna be paying for in 0:08:01.835 --> 0:08:03.006 the percentage based on the 0:08:03.092 --> 0:08:06.562 tax bracket. So when you file for all these claims, 0:08:06.571 --> 0:08:10.252 salaried or self employed and you're on the IRS website, 0:08:10.261 --> 0:08:14.522 for example. Right. Are there certain sort of requirements or 0:08:14.532 --> 0:08:17.932 preconditions prerequisites that you have to meet in order to 0:08:17.941 --> 0:08:21.481 make these claims? I think it's stipulated over there, what 0:08:21.492 --> 0:08:23.272 is eligible and what's not? Right. 0:08:23.510 --> 0:08:26.480 So as always, not sure. Give them a call, I 0:08:26.489 --> 0:08:29.929 think they've clarified it pretty well. They've given, given examples 0:08:29.940 --> 0:08:33.840 on what are certain business expenses that are claimable. So 0:08:33.849 --> 0:08:36.010 I guess the equation is very wide. 0:08:36.320 --> 0:08:38.530 Let's look at each example. And if not just as 0:08:38.539 --> 0:08:41.510 we check with Iras, what is eligible on that note, 0:08:41.520 --> 0:08:43.440 I just want to bring up here that there is 0:08:43.450 --> 0:08:46.950 a very good web page. It's actually a pretty cool 0:08:46.960 --> 0:08:50.289 infographic style web page on Iris. It's triple W dot 0:08:50.299 --> 0:08:54.049 Irs dot gov dot SG slash taxes. You'll see a 0:08:54.059 --> 0:08:58.900 section on individual income tax and there's a whole bunch 0:08:58.909 --> 0:09:00.900 of different types of rebates really 0:09:01.562 --> 0:09:05.531 and deductions that you can make. Speaking of which, hey, Josh, 0:09:05.541 --> 0:09:07.192 I wanted to ask you, would you be able to 0:09:07.202 --> 0:09:11.271 explain to us the difference between a deduction, a relief 0:09:11.280 --> 0:09:14.921 and a rebate? A rebate is an amount that nets 0:09:14.932 --> 0:09:17.921 off from your final bill? Ok. So for example, if 0:09:17.932 --> 0:09:20.752 your tax bill is $10,000 and you have a kid, 0:09:20.771 --> 0:09:24.702 there's actually a kid rebate, a child rebate. So for parents, yes, 0:09:24.711 --> 0:09:25.591 that is an amount 0:09:25.703 --> 0:09:29.363 you can use to net off that 10,000 tax bill, right? 0:09:29.583 --> 0:09:32.994 So government is actually giving us money, money or having Children, 0:09:33.004 --> 0:09:35.883 correct in certain and between the parents to split, to 0:09:35.893 --> 0:09:37.924 use that amount and the other thing to note. So 0:09:37.934 --> 0:09:41.114 this amount there's no expiry, you can claim it over 0:09:41.124 --> 0:09:44.883 multiple years. So don't rush. So always be aware that 0:09:44.893 --> 0:09:48.643 this rebate nets off the final bill. Sure. So the 0:09:48.653 --> 0:09:50.283 deductible portion is your total 0:09:50.395 --> 0:09:53.455 income. Yes, we all these deductibles and then that's your 0:09:53.466 --> 0:09:57.135 chargeable income, right? And that's the, that net income is 0:09:57.145 --> 0:09:59.785 what gets charged for income tax. Yes. Correct. There's a 0:09:59.796 --> 0:10:03.986 chargeable income. Ok. So our attempts that relieves and deductibles, 0:10:03.995 --> 0:10:05.966 they are actually the same side of the coin, right? 0:10:05.986 --> 0:10:08.665 Is to reduce this chargeable income. Got it to a 0:10:08.676 --> 0:10:11.796 lower bracket because if you see the tax bracket, it 0:10:11.806 --> 0:10:14.976 jumps once you pass 100 180,000, 0:10:15.229 --> 0:10:18.390 as you earn more, you naturally see your tax bill go. Yeah. Yeah. Oh, 0:10:18.400 --> 0:10:22.390 my dear. I'm just suddenly remembering my dad's annual salary 0:10:22.619 --> 0:10:24.950 and the number of years he had been taking care 0:10:24.960 --> 0:10:28.479 of my late grandfather. I don't think he knew that 0:10:28.489 --> 0:10:31.789 there was a parent care, sort of tax relief that 0:10:31.799 --> 0:10:34.919 he could have used to reduce his net chargeable income. 0:10:34.989 --> 0:10:37.750 And on that point, parents staying with you and parents, 0:10:37.760 --> 0:10:40.250 staying away, it's also a different limit. All right. Ok. 0:10:40.344 --> 0:10:43.445 So that is where you need to impute manually. Right? 0:10:43.515 --> 0:10:45.723 So parents staying with you, you'll see the amount is 0:10:45.734 --> 0:10:48.405 higher and if the parents handicap, my own father is 0:10:48.414 --> 0:10:52.674 handicapped patient. So there's also different here. Ok. So, so 0:10:52.684 --> 0:10:54.973 it's follow the amounts because that amount have actually increased 0:10:54.984 --> 0:10:56.794 along the years. And what we mentioned over here you 0:10:56.804 --> 0:10:58.005 might change next year. 0:10:58.500 --> 0:11:00.710 But do is check and the other thing is the 0:11:00.719 --> 0:11:03.690 parents to get that relief, they must not be earning 0:11:03.700 --> 0:11:06.959 active income, right? So if they're earning more than 4000 0:11:06.969 --> 0:11:10.150 a year, then there's not eligible? Sure. Ok. And is 0:11:10.159 --> 0:11:12.909 there any documentation we have to provide in order to 0:11:13.200 --> 0:11:15.949 make sure that we are eligible for this and all 0:11:15.960 --> 0:11:18.630 the other claims? Actually, no need. I haven't seen Iras 0:11:18.640 --> 0:11:21.979 requiring a proof yet on that. So there's no need 0:11:21.989 --> 0:11:24.960 to worry about proving that portion. We just declare it 0:11:25.130 --> 0:11:28.900 a very interesting. Yeah, and that's great because I know 0:11:28.909 --> 0:11:31.069 in the US tax season is a nightmare for my 0:11:31.080 --> 0:11:34.299 American friends because they have to find receipts from like 0:11:34.309 --> 0:11:37.659 an entire year's worth of expenditure. I really, 0:11:37.929 --> 0:11:39.988 that scares me to no end. So I'm glad that 0:11:40.000 --> 0:11:42.719 we don't have to do that. Ok. So there are 0:11:42.729 --> 0:11:46.169 just too many, so many tax reliefs available out there. 0:11:46.309 --> 0:11:49.390 What are some of the key ones that you feel Josh, 0:11:49.640 --> 0:11:54.099 that the average Singaporean should pay attention to? I'm a 0:11:54.109 --> 0:11:57.390 big advocate of SRS supplementary retirement scheme. 0:11:58.260 --> 0:12:01.348 I like it because it's flexible in terms of every 0:12:01.359 --> 0:12:04.400 year you have this limit 15,000 tree. Just keep that 0:12:04.409 --> 0:12:05.039 back of mind. 0:12:05.450 --> 0:12:08.989 And if you want to up your total tax deductibles 0:12:09.000 --> 0:12:12.989 contributing to that space is somewhere you can explore. And 0:12:13.000 --> 0:12:15.030 the good part about it is just in case you 0:12:15.039 --> 0:12:18.109 need back that money, you can actually take it out, 0:12:18.119 --> 0:12:22.229 of course, with penalties. Right. Right. And because you're essentially 0:12:22.239 --> 0:12:25.650 drawing down from your retirement fund, it's meant for retirement, right? 0:12:25.659 --> 0:12:29.059 So the penalties to dissuade you from doing so. So 0:12:29.070 --> 0:12:31.880 in a nutshell, it's a 5% penalty and it adds 0:12:31.890 --> 0:12:34.270 to your annual income for that year, 0:12:34.739 --> 0:12:39.380 but it's still accessible versus contributing to CPF. Right. And 0:12:39.390 --> 0:12:41.729 just I mentioned I'm self employed. So cash, cash is 0:12:41.739 --> 0:12:45.489 king and allocating it to where it can be flexible 0:12:45.500 --> 0:12:48.599 is also a priority. You need something that's liquid. Yes. 0:12:48.609 --> 0:12:50.359 So that's why I've actually contributed 0:12:50.414 --> 0:12:53.354 to my S RS at a very early age. Right now. 0:12:53.364 --> 0:12:55.284 I've actually did a recent sum of it is about 0:12:55.294 --> 0:12:59.304 260,000 build up over the years and you can guess 0:12:59.315 --> 0:13:03.705 it's compounded year on year, over like 10 years. You 0:13:03.715 --> 0:13:06.034 are the envy of so many right now, I'm sure. 0:13:06.434 --> 0:13:10.505 But this is all for retirement money. You can't spend 0:13:10.515 --> 0:13:13.815 it off, but hopefully it to build a secure future 0:13:13.825 --> 0:13:14.723 for family. Yeah. 0:13:18.280 --> 0:13:21.419 Hello everyone. My name is Christina and I'm Adrian and 0:13:21.429 --> 0:13:23.450 we are the host of a podcast called Work It. 0:13:23.469 --> 0:13:25.419 If you never heard of it. Well, it's a good 0:13:25.429 --> 0:13:27.859 time to tap in, in the last 20 episodes. We've 0:13:27.869 --> 0:13:31.339 discussed topics like how to negotiate for a salary increase 0:13:31.349 --> 0:13:33.819 or how to get along with younger colleagues who have 0:13:33.830 --> 0:13:35.500 different values from you, which 0:13:35.650 --> 0:13:39.270 incidentally is our top performing episode. If what consumes your 0:13:39.280 --> 0:13:43.010 life and you want some perspective on issues like management stress, 0:13:43.020 --> 0:13:46.780 even office romance. This podcast should be on your list. 0:13:46.789 --> 0:13:49.979 A new episode drops every Monday. Catch us on the 0:13:49.989 --> 0:13:52.909 CN or wherever you get your podcast. 0:13:58.799 --> 0:14:02.260 Ok. So I'm going to bring back that course fees. One. 0:14:02.270 --> 0:14:03.750 Tell me about that one 0:14:04.409 --> 0:14:07.030 that I actually didn't tap on myself because I actually 0:14:07.039 --> 0:14:10.280 reached that limit. So, what is the cost fees? Is 0:14:10.289 --> 0:14:13.000 it a rebate or relief or there is a relief relief? 0:14:13.010 --> 0:14:16.969 There are certain causes that are quali, oh, so I've 0:14:16.979 --> 0:14:20.380 seen that in private clients statements, right? And I think 0:14:20.390 --> 0:14:22.489 it's not too difficult to claim, right? So you just 0:14:22.500 --> 0:14:24.229 need to see what kinds of courses are eligible. 0:14:24.645 --> 0:14:26.945 Ok. Ok. So if you're looking to eke out and 0:14:26.955 --> 0:14:29.515 you're looking to upgrade at the same time, don't take 0:14:29.525 --> 0:14:32.505 causes just for relief because you're still spending money. Yes, exactly. 0:14:32.515 --> 0:14:33.965 I was just going to say it's not a free 0:14:33.974 --> 0:14:36.655 pass for you to spend more money, right. Ok. What 0:14:36.664 --> 0:14:41.835 about the kinds of reliefs and claims that Singaporeans are 0:14:41.844 --> 0:14:45.364 not necessarily aware of good question brings me to a 0:14:45.375 --> 0:14:49.494 case which I did recently. So couple, I have two kids. Ok. 0:14:49.674 --> 0:14:52.614 And what I usually observe is like if both are 0:14:52.625 --> 0:14:53.744 high income earners 0:14:54.630 --> 0:14:58.820 usually first kid or maybe daddy takes second kid, maybe 0:14:58.830 --> 0:15:02.140 mommy takes and over the years, they didn't actually realize 0:15:02.150 --> 0:15:04.799 that in 2018, there's this relief cap of 80,000 which 0:15:04.809 --> 0:15:07.969 we have been hinting throughout our episode. Ok. So what 0:15:07.979 --> 0:15:11.169 happens is mommy actually has hit that relief cap and 0:15:11.179 --> 0:15:14.630 that child's relief is actually wasted. Each child is 4000 0:15:14.640 --> 0:15:18.859 relief wasted because that whole change in total tax relief. 0:15:18.869 --> 0:15:19.200 $80 0:15:19.419 --> 0:15:23.049 really impacted working moms. Of course, that is the most 0:15:23.059 --> 0:15:26.710 powerful tax relief. I know it is like 15% for 0:15:26.719 --> 0:15:30.570 1st 2nd kid, 20% 3rd kid is 25% also have 0:15:30.580 --> 0:15:34.179 more kids, then you get more tax relief. So what 0:15:34.190 --> 0:15:37.570 happened was previously some high income moms with 34 kids 0:15:37.580 --> 0:15:40.659 who pin next to nothing in those of taxes. So 0:15:40.669 --> 0:15:43.809 I guess they were the groups that were the most impacted, right? 0:15:44.119 --> 0:15:46.469 And what happens is when you get busy, you have kids, 0:15:46.479 --> 0:15:48.789 you don't see your tax bill. You assume status quo 0:15:48.799 --> 0:15:51.770 is fine and didn't realize this 4000 can be transferred 0:15:51.780 --> 0:15:57.179 to hubby. Yeah. So if mommy is wasting that relief 0:15:57.190 --> 0:16:01.049 because if you got 100,000 of total relief is only 0:16:01.059 --> 0:16:03.419 going to be 80,000, right? So you should give away 0:16:03.429 --> 0:16:05.590 your grandparent leave. You should give her your parents, you 0:16:05.599 --> 0:16:08.289 should give your child waste it. It's there for you 0:16:08.299 --> 0:16:11.739 to take. Exactly. Wow. So give us a call, 0:16:12.025 --> 0:16:14.664 change the name. I think you can do it online also. 0:16:14.674 --> 0:16:16.895 I'm not too sure. The steps. Right. I'm sure they'll 0:16:16.905 --> 0:16:19.215 make it easy for you to do it. I realized 0:16:19.224 --> 0:16:22.905 those parents have neglected optimizing such things. And if you're 0:16:22.914 --> 0:16:26.294 on a high tax bracket you r 4000 times a percentage, 0:16:26.304 --> 0:16:29.184 a lot, you know, it, it adds up to a 0:16:29.255 --> 0:16:30.724 scary number. 0:16:31.710 --> 0:16:34.580 Ok. And there was this grandparent relief that you talked 0:16:34.590 --> 0:16:36.580 about also that I found interesting. 0:16:36.940 --> 0:16:39.859 I did some digging of my own and I found 0:16:39.869 --> 0:16:43.669 that there was something called a helpers relief. Talk to 0:16:43.679 --> 0:16:45.960 us about that one. I think I don't have a 0:16:45.969 --> 0:16:49.580 helper to start with. Ok. I think that is automatically 0:16:49.590 --> 0:16:53.580 imputed if I'm not wrong because once you hire a helper, 0:16:53.590 --> 0:16:56.909 it goes through the system. That's true. Everything is all 0:16:56.919 --> 0:16:59.840 because it's legalized. Everything is run through the same system, 0:16:59.849 --> 0:17:02.479 the same way pass gives us access to everything, right? 0:17:02.609 --> 0:17:04.760 So that comes in, right? 0:17:05.022 --> 0:17:09.302 Ok. There's also for those interested, there's also a qualifying 0:17:09.311 --> 0:17:14.522 child relief or handicapped child relief. So it's pretty inclusive 0:17:14.833 --> 0:17:20.772 ns men, wife relief. Who knew that having your husband 0:17:20.892 --> 0:17:26.833 having been an NS man before benefits you as the wife. Right. Absolutely. Yeah. 0:17:26.892 --> 0:17:29.203 So for this, if I know it's also auto imputed 0:17:29.213 --> 0:17:32.342 for guys I've seen in my wife's statement also, I 0:17:32.353 --> 0:17:32.662 don't know, 0:17:32.786 --> 0:17:35.844 I found this super long ago I've done with my 0:17:35.855 --> 0:17:39.595 national service, but every year we do see it once. Ok. 0:17:39.605 --> 0:17:43.754 So let's get back to that CPF topic. Ok. And 0:17:43.765 --> 0:17:45.686 I know you did say that you have a preference 0:17:45.696 --> 0:17:49.326 to top up your sr topping up your CPF. But 0:17:49.336 --> 0:17:51.916 it doesn't mean that there isn't a tax relief that 0:17:51.926 --> 0:17:53.875 comes out of it when you do top up your CPF. 0:17:53.885 --> 0:17:56.566 And I actually know that people don't know about this, 0:17:56.576 --> 0:17:58.805 that topping up your CPF, you can actually sort of 0:17:58.816 --> 0:18:00.605 claim it back in a way, right? 0:18:00.839 --> 0:18:03.099 So we've had a number of guests on money talks, 0:18:03.109 --> 0:18:07.500 mentioned this. So talk to us about CPF Relief, how 0:18:07.510 --> 0:18:11.099 it works and how it works in tax gains. Basically, 0:18:11.329 --> 0:18:13.948 maybe let's start with CPF Relief because that's different from 0:18:13.959 --> 0:18:17.959 retirement sum up, correct. So CPF Relief, you have to 0:18:17.969 --> 0:18:20.780 understand there are two segments. One is if you are employed, 0:18:20.790 --> 0:18:23.069 which is fed by company, yes, you see there's a 0:18:23.079 --> 0:18:26.129 cap on the amount that you contribute yourself, right? That 0:18:26.140 --> 0:18:29.859 cap is 20,400 on the self employed front. That's where 0:18:29.869 --> 0:18:30.099 you have 0:18:30.189 --> 0:18:33.910 the full voluntary contribution that you can claim. So don't 0:18:33.920 --> 0:18:37.899 confuse the two segments. If for most of us listening in, 0:18:37.910 --> 0:18:40.989 I guess you're not employed segment. So that is automatically 0:18:41.000 --> 0:18:43.790 filled up to 20,400. We have a high income that's Right. 0:18:43.900 --> 0:18:46.530 That brings us to the next topic of some topping up, 0:18:47.130 --> 0:18:48.920 you know, recently there's this change 0:18:49.229 --> 0:18:52.469 that allows you to get relief if you contribute to 0:18:52.479 --> 0:18:56.889 either the special account or the Medisafe account. Right. So 0:18:56.900 --> 0:19:00.409 either or so, you know, high income friends who are 0:19:00.420 --> 0:19:02.819 in their forties, usually they have their full amounts in 0:19:02.829 --> 0:19:05.560 their special account. They can't top up to that front. 0:19:06.079 --> 0:19:08.989 But little did they know this change allows them to 0:19:09.000 --> 0:19:13.188 pump in money to Medisafe and still get tax relief? Oh, wow. Ok, 0:19:13.199 --> 0:19:15.899 Medisafe is used all that. You know, you have the 0:19:15.910 --> 0:19:19.050 one that moves. Right. Exactly. So baby born 0:19:19.775 --> 0:19:24.484 deductions mom goes to hospital. Anytime that falls below, there's 0:19:24.494 --> 0:19:28.014 a term for basic health care sum. Anytime it falls below, 0:19:28.025 --> 0:19:30.385 that's your opportunity to top it up to top it 0:19:30.395 --> 0:19:32.844 up with cash. Of course, make sure that you're ok 0:19:32.854 --> 0:19:35.464 with that cash flow. You don't need it because money 0:19:35.474 --> 0:19:38.574 send in. You're not gonna see for a while. But 0:19:38.584 --> 0:19:40.795 the idea is if you have spare cash, you like 0:19:40.805 --> 0:19:44.464 that 4% interest from Medisave and a lot of people do. Yes. 0:19:44.474 --> 0:19:46.573 Might as well. You pump it in, you get your 0:19:46.584 --> 0:19:48.905 tax relief, you get your 4% compounding 0:19:49.170 --> 0:19:50.589 and that money will be there for you when you 0:19:50.599 --> 0:19:52.750 need it for medical needs. There you go see. It's 0:19:52.760 --> 0:19:56.889 a win win situation. Ok. So we've covered CPF we've 0:19:56.900 --> 0:19:59.750 covered the SRS and we've covered the different types of 0:19:59.760 --> 0:20:04.829 rebates and reliefs and deductions out there now enters the 0:20:04.839 --> 0:20:09.630 big shadow of doubt. Are there any limits or caveats 0:20:09.939 --> 0:20:14.069 including eligibility, which we kind of mentioned a little bit earlier? 0:20:14.380 --> 0:20:17.619 Any limits of caveats restrictions? Perhaps we should keep in 0:20:17.630 --> 0:20:22.379 mind when claiming all these tax reliefs, I think the 0:20:22.390 --> 0:20:27.010 restrictions will be based on each individual relief. Like what 0:20:27.020 --> 0:20:30.989 we mentioned parents relief, there's a 4000 income limit. So 0:20:31.000 --> 0:20:33.719 do check on each individual and read the terms and conditions. 0:20:34.040 --> 0:20:37.449 But in total, that total relief is $80,000. 0:20:38.010 --> 0:20:41.119 So you see your CPF contributing to your SRS relief 0:20:41.660 --> 0:20:45.339 and as men relief, etcetera, I mean, children's relief. And 0:20:45.349 --> 0:20:47.629 once you hit that 80,000 us, you can't get more 0:20:48.410 --> 0:20:52.239 deductions how to reduce the tax bill further. So I've 0:20:52.270 --> 0:20:54.900 actually shared on my channel that I've actually made a 0:20:54.910 --> 0:20:59.489 pledge to a Bursary in my alma mater. And so 0:20:59.500 --> 0:21:02.669 I'm committed to donating an amount. Yes. And as you 0:21:02.680 --> 0:21:05.379 can see, government actually gives that incentive, which is a 0:21:05.390 --> 0:21:07.630 2.5 times why you donated? 0:21:07.785 --> 0:21:11.454 That's a lot. Correct. Yeah, so 90,000, if you work backwards, 0:21:11.675 --> 0:21:15.573 that means that donation to me is $4000 4000 times, 0:21:15.584 --> 0:21:18.454