How to Reduce Income Taxes

We’re all looking for ways to lower our tax bills. Following are some very simple ideas on how to reduce income taxes this year, and for many years to come. It’s important that all families take a look at these tips and see which ones can help you reduce your tax bill.
Fund your retirement – Of course, we all need to save for retirement. But, did you know that saving for retirement is a great tip when you’re wondering how to reduce income taxes? By saving for retirement, you’re reducing your adjusted gross income by the amount you save, thereby reducing the income you have to pay taxes on.
Sell stocks that aren’t doing well – Look at your portfolio and determine the stocks that are worth far less than when you bought them – and then sell them. Losses on stocks are tax deductions. If you sell them for more than you paid, then you’ll have to pay capital gains taxes. When you’re trying to figure out how to reduce income taxes, don’t forget to look at those stocks that have lost money for you.
Get a mortgage – If you don’t own a home, you’re missing one of the biggest tax savings opportunities, and it’s no wonder you’re asking how to reduce income taxes! The interest you pay on your mortgage is tax deductible, and in the first few years of a mortgage, most of your house payments go to interest, so you can save a bundle.
Get a second mortgage! -If you have other debts, like a car loan or credit cards and you’re wondering how to reduce income taxes, consider taking out a home equity loan and using the money to pay off your other debts. Like your primary mortgage, the interest you pay on your home equity loan is tax deductible, but the interest on your credit cards and car loans is not.
Deduct Your Child’s Tuition – If you’re paying college tuition you can deduct this from your taxes, too. Of course, the tuition must be coming out of your pocket, not from a tax free savings account for college like a 529 plan. If you don’t have a child in college, consider taking a few classes yourself, as your tuition is deductible too!
Make your home more energy efficient – When you require new appliances for your home, such as a hot water heater, be sure to look for appliances that carry the government’s energy star rating. Items purchased with the energy star rating are eligible for tax deductions. In addition, when you replace your old appliances with energy efficient ones, you’ll save money every month on your utility bills.

Singapore Personal Income Tax

Personal income tax rates in Singapore are one of the lowest in the world. In order to determine the Singapore income tax liability of an individual, you need to first determine the tax residency and amount of chargeable income and then apply the progressive tax rate to it. Key points of Singapore income tax for individuals include:

A progressive tax rate is followed in Singapore that starts from at 0% and ends at 20% above S$320,000.
No capital gains tax or inheritance tax is imposed.

Only income earned in Singapore is taxed. Aside from a few exceptions, income earned by individuals abroad is not subject to taxation.

Tax rules differ based on the tax residency of the individual.

Tax filing due date for individuals is April 15 of each year. Income tax is assessed based on a preceding year basis.

Filing of personal tax return is mandatory if your annual income is S$22,000 or more. If your annual income is less than S$22,000, you need not pay for income tax. However, you may still need to file a tax return if you have been informed by Singapore tax department to submit your tax return.

For tax payable for YA 2011, all resident individual tax payers will be given a one-off income tax rebate of 20%, up to a cap of S$2,000.

It is an annual obligation of every eligible taxpayer to file his annual tax returns. The 15th of April is the deadline to submit all completed forms to the Singapore tax department.

You do not need to pay tax if your annual income is less than S$22,000. However, you may still need to file returns if you have been informed by tax authority to submit your tax form. If you have not earned any income in previous years, you still need to declare zero income in your tax form and submit it by 15 April. It is compulsory for you to file tax returns if your annual income is S$22,000 or more.

You can choose to file your returns online or by mail. From February to March, you will receive the appropriate paper tax form from the IRAS, as follows:

1.For tax resident individuals Form B1
2.For self-employed Form B
3.For non-resident individuals Form M

Penalties are imposed for late filing or non-filing.
A Notice of Assessment or tax bill will be sent to you by September after you have filed your returns. The tax bill will indicate the amount of tax you have to pay. If you disagree with your tax amount, you need to inform tax department within 30 days from the date of your tax bill and state your reasons for objection.
You need to pay the full amount of tax within 30 days of receiving your Notice of Assessment. This is despite your notification to the tax authority about any objection. If your tax remains outstanding after 30 days, a penalty will be imposed.