Tax Relief Strategies

Tax season has started. My friends were wondering if there was any way to maximise their relief.

So… here goes

To be fair, IRAS has created a self-service portal here.
Once you check the boxes, all the reliefs that might apply will be shown.

I’ll cover the ones that mattered more to me + one bonus for working mothers that’s off everyone’s radar.

Common ones

These are the popular ones that are highly publicised:

CPF Cash Top up to MA/SA – up to $8000
CPF Cash Top for spouse/parents up to SA/RA – up to $8000
**it’s important if your parents are eligible MRSS top-up**
SRS Cash Top up – up to $15,300

Donations

This is less talked about as people are quite private or humble about the charities they support.

You do get 2.5X tax relief for donations made to local charities. I was sulky over this as I’m doing a child sponsorship overseas that doesn’t qualify.

So on top of that, I do donate locally when the opportunity arises.

Another possibility is to talk with your family. If there are causes that they are supporting annually, ask if you could donate instead.

Fun Fact: You’ve might have heard of stories where people chose to donate instead of paying taxes.
So, is it possible to equally offset the taxes I must pay through donations?

For folks like us, it’s only possible if your income tax rate is 40% which thankfully doesn’t exist.

Parent Relief

I had always thought I wasn’t eligible for this as my mother is working on an ad-hoc basis.

However, it turns out that you can claim as long as your parent’s annual income doesn’t exceed $4,000. That’s like $333.33 a month.

The best way to be sure is to check the CPF contribution. Since it’s under $500, there is no employee contribution, You only need to divide by the employer contribution rate.

This relief is substantial for me as I’m staying with my parents so that’s $9,000 while if I were staying else where I could only get relief of $5,500.

Also, if you have missed this previously, try reaching out to IRAS and see if they can help you.

Bonus: Grandparent Caregiver Relief

This relief is for working mothers only. (Fathers don’t switch off)

Generally, it is eligible when their parents/parents-in-law are helping to look after their child who is below 12 years old.

The same annual income requirement of $4000 applies here and the total relief you can get is $3000.

This relief can be stacked with Parent Relief if the same parent qualifies.

PS: I realised most mothers do not know about this, so please share this around.🙏

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