It is the tax season once again. For working adults in Singapore, it is a time to do our part to contribute to national revenues.
On the bright side, if your tax bill looks a hefty, this means you’ve done well for yourself over the past year, and you can take comfort in the knowledge that Singapore has one the lowest tax rates in the world.
To help you do your civic duty, DollarsAndSense has put together this guide to help you through the process as painlessly as possible.
If you find this guide useful, do share it with people whom you think will benefit.
Let’s get to it!
# 1 Do I Even Need To File?
Filing your income tax returns is the annual process of declaring various forms of income and deductibles to the Inland Revenue Authority of Singapore (IRAS). Your tax bill for the year is derived from your tax returns.
If you received a notice (via letter or SMS) informing you to file your income tax: You need to file your income taxes.
If you received a No-Filing Service notice (via letter/SMS): Your tax returns have been filed automatically. You don’t have to file this year, unless you have additional income to declare or wish to claim additional reliefs or deductions. Otherwise, you can await your tax bill from IRAS and pay accordingly when it comes.
If your employer participates in the Auto-Inclusion Scheme (AIS): Fields in your tax returns regarding your salary will be pre-filled, but you will still need to complete the remainder of your tax return form.
If you didn’t receive anything from IRAS: You will need to file income tax returns if your total personal income (including salaries and rental income) from 1 January to 31 December 2018 is more than $22,000 or if your net business income derived from Singapore is more than $6,000.
# 2 When Do I Need To File?
For the year of assessment of 2019, the deadline for filing are as follows:
15 April 2019 (for paper filing)
18 April 2019 (for e-filing)
Don’t procrastinate. Late filing (or non-filing) carry penalties that range from increased tax dues to a court summon and even an arrest order.
# 3 What Do I Need To Prepare Before Filing?
– Ensure you can access your SingPass, including two-factor authentication (2FA). You will need it to access myTaxPortal.
– If you are a salaried employee of a company that isn’t under the AIS, you would have received a IR8A form from your employer.
– Records for declaring taxable income.
– Records for filing tax deductions and reliefs.
# 4 Filing Your Income Tax In 3 Simple Steps
Step 1: Login to myTaxPortal
Using your SingPass, login to myTaxPortal. Once you’re in, click on the Individuals tab, followed by View Filing Status. Based on your situation outlined in # 1, you can see what your next actions should be.
Even if you are under the No-Filing Service, you should still view your returns and check for any omissions or errors. We highly recommend you do so, because there might be some deductions and reliefs you are eligible for and you might not even realise it.
Step 2: File/Check Your Returns (Form B/B1)
Click on the Individuals tab and then the File Individual Income Tax Form B/B1. Here is where you need to declare assessable income earned for the year 2019, as well as deductions and reliefs you wish to claim.
Assessable income refers to the total income you earn after the deduction of allowable expenses and approved donations. For most of us, our assessable income would comprise mainly of the salary received from our job. It can also include the income received from part-time or freelance jobs, or rental income from properties.
Not all income earned in Singapore are considered assessable income. For example, earnings from lottery are not taxable. Neither are capital gains made from stocks or property investments.
The table below is a non-exhaustive list of what are the taxable and non-taxable items.
You can click on these links to find out more about what each item under “Other Income” mean: 1) Dividends 2) Interest 3) Rent from Property 4) Royalty 5) Charge 6) Estate/Trust Income 7) Gains or Profits of an Income Nature.
Chargeable income refers to the total amount that you would be taxed after deducting personal reliefs from your assessable income. As your chargeable income increases, you can expect your income tax payable as a percentage of your total income to increase.
In other words: Assessable Income – Deductions & Reliefs = Chargeable Income
Your chargeable income determines your tax bill, which increases in percentage as you move up the income bracket.
After you are done with the income section, look through the list of deductions and reliefs carefully so that you do not miss out on any ‘discounts’ on tax you are entitled to. These include NSman reliefs, Working Mother’s Child Relief, reliefs for voluntarily contributing to your CPF or Supplementary Retirement Scheme accounts.
Some of these deductions depend on actions you take from 1 January to 31 December 2018. We wrote an article previously outlining some of these steps you could take to (legally) reduce your personal tax bill. To ensure you don’t miss important articles, consider joining our DollarsAndSense Telegram Channel, where we bring you daily updates in an interactive, bite-sized format.
Just for this year (YA2019), Finance Minister Heng Swee Keat announced that all Singaporeans will enjoy a 50% personal income tax rebate, capped at $200.
Step 3: Make your declaration and save a copy of the acknowledgement
Once you declared that all information you provided in the tax return form is correct to the best of your knowledge, you’re done! You should see an Acknowledgement Page. Save or print it for your records.
You can double check that IRAS has received your tax returns by clicking on the Individuals tab again and then View Filing Status.
# 5 What’s Next?
You’re done with filing your taxes for the Year of Assessment 2019.
All that’s left is to await your Notice of Assessment (NOA) from IRAS, which is your tax bill. You will receive your NOA between April to September 2019, which is a wider window than a newborn’s estimated delivery window. And just like receiving a newborn, you should already anticipate how much your taxes will cost you and start saving for it.
As soon as you receive your NOA, check it carefully and if there are any discrepancies, you should file an objection with IRAS within 30 days from the date on your NOA.
If everything is in order, you can pay your tax bill by a variety of methods, including:
– One-time or 12-month interest-free GIRO deductions
– Credit cards
– Internet banking bill payment/fund transfer
– AXS, SAM, ATM (DBS/POSB or OCBC only) machines
– NETS at any Singapore Post branch
While not all credit cards can be used for income tax payments, those that you can use typically exclude tax payments from earning you card rewards such as cashback, miles or points.
By using a tool like CardUp to make payment, you can get to enjoy cashback, miles or points on every dollar made to the tax authorities. CardUp allows any credit card to be used for your tax payments conveniently online, without the need to do so at AXS machines.
That’s it. Give yourself a pat on the back for contributing to Singapore’s continued development.
DollarsAndSense.sg aims to provide interesting, bite-sized and relevant financial articles.
Learn together with like-minded Singaporeans at the Personal Finance Discussion SG Facebook Group by discussing a range of personal finance topics.
If you have not done so, subscribe to our free e-newsletter to receive exclusive content not available anywhere else.