Parenthood Tax Rebate Rocks!
Of course, everyone hates to pay taxes. It's money that seems like an unnecessary burden. I am not entirely clear how the tax collection system works in other countries but I am very impressed with how the Singapore system is. No joke on their efficiency and these are the little things the citizens sometimes take for granted.
Safety, efficiency, transparency.
These 3 qualities are enough to make me so proud of Singapore every time I go overseas and how my international friends are so envious of us. I know detractors will like to pinpoint our little flaws after all, you can't be perfect. High cost of living, trains keep breaking down and rigid education system... you get the point.
Anyway, I applied for the 12 months interest-free instalments to pay my taxes every year. It's interest-free so why not? But as you guys know, I recently changed job from my regional role to my own business so salary is drastically reduced. After being notified that the instalments will continue to be deducted this year based on last year's salary, I logged into my IRAS system and sent them an update, telling them of the salary change.
Within a month, they gave me back the excess they have deducted.
Super impressive. People like to say it's easier to give money than to collect back but it's not true in this case. I can imagine how efficient IRAS is also to corporations and also those who evade taxes, good for them and for us citizens too.
Back to the topic, the parenthood tax rebate is really awesome for families. I initially thought it is a tax relief, which means the figure is to offset the chargeable income. Tax relief is for example, if you earn $100,000, the relief is at $5,000 and this means your chargeable income is at 100,000 - 5,000 = $95,000.
But no, it's a tax rebate!
Which means for $100,000 chargeable income, you will have to pay $5,650 taxes a year. For parenthood tax rebate, the first child gives you $5,000 rebate so you only have to pay 5,650 - 5,000 = $650! What's even better is that you can share this tax rebate with your spouse and the unused portion can also be used to offset future taxes!
How cool is that?
If you have more children, you will have even more tax rebates! Not to forget for working mums, we also have the Working Mother’s Child Relief (WMCR), so I definitely don't have to pay taxes this year.
Yes, yes it's a small amount but I still think it's better than nothing! It's definitely not enough to push people to give birth but it's a welcomed gift to expanding families.
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Safety, efficiency, transparency.
These 3 qualities are enough to make me so proud of Singapore every time I go overseas and how my international friends are so envious of us. I know detractors will like to pinpoint our little flaws after all, you can't be perfect. High cost of living, trains keep breaking down and rigid education system... you get the point.
Anyway, I applied for the 12 months interest-free instalments to pay my taxes every year. It's interest-free so why not? But as you guys know, I recently changed job from my regional role to my own business so salary is drastically reduced. After being notified that the instalments will continue to be deducted this year based on last year's salary, I logged into my IRAS system and sent them an update, telling them of the salary change.
Within a month, they gave me back the excess they have deducted.
Super impressive. People like to say it's easier to give money than to collect back but it's not true in this case. I can imagine how efficient IRAS is also to corporations and also those who evade taxes, good for them and for us citizens too.
Back to the topic, the parenthood tax rebate is really awesome for families. I initially thought it is a tax relief, which means the figure is to offset the chargeable income. Tax relief is for example, if you earn $100,000, the relief is at $5,000 and this means your chargeable income is at 100,000 - 5,000 = $95,000.
But no, it's a tax rebate!
Which means for $100,000 chargeable income, you will have to pay $5,650 taxes a year. For parenthood tax rebate, the first child gives you $5,000 rebate so you only have to pay 5,650 - 5,000 = $650! What's even better is that you can share this tax rebate with your spouse and the unused portion can also be used to offset future taxes!
How cool is that?
Yes, yes it's a small amount but I still think it's better than nothing! It's definitely not enough to push people to give birth but it's a welcomed gift to expanding families.
__________________________________________________________________________________________________
Like me on Facebook to be updated on more #Familytalk and #Finance posts.
Jes
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Hi Jes,
ReplyDeleteThe beauty of the parenthood tax rebate is that it can be shared between the parents. Fathers are not entitled to the WMCR :(
Cheers,
Naro
Hi Naro,
DeleteLong time no see! Yeah man, I agree that to share the rebates is so cool. If fathers is entitled, it should be called WPCR haha. Anyway, the society needs more women to work instead of men since mothers still play a more involved role.
Hi Jes, yup. Ive been more of a reader than contributor the last year or so. Glad to see your are doing well now!
DeleteCheers,
Naro
Hi Naro,
DeleteReader or contributor, it doesn't matter as long as you are still with the community! I am slowly turning into reader too... thanks for your concern, I am indeed happier now :)
Hhaha, rebate is so much more powerful than relief! I didn't pay any tax this year because of that too :)
ReplyDeleteAnd regarding the WMCR, I always say that it encourages men to stay home and not work, rather than encourage mothers to work lol
As a self employed, have to do quite a few things ourselves...you probably have to claim for maternity yourself and child care leave. I did it, and was relatively painless, as long as you have tax records to show you're self employed.
Hi LP,
DeleteIt's the first time I did not pay any taxes thanks to all the rebates. That's very true, so the mother should go work while the men stay home to take care of the kids. I encourage you to try it :P
In general, dealing with government organisations and paper work have been pretty painless, both in terms of claiming things and filing for work stuff. Makes me feel so lucky to work in Singapore! :)