Did you know that in Singapore, there are various personal reliefs and rebates that could potentially reduce your income tax by up to $80,000?
Filing taxes can be a maze of confusion, especially for self-employed individuals like real estate agents.
Although your agency usually assists in submitting your income data for auto-filing, you need to be aware of the tax reliefs you are eligible for to maximise your benefits.
Here are some of the lesser-known tax reliefs and rebates that might have slipped under your radar.
Topping Up Your Loved Ones’ and Your CPF
Topping up your Special Account (SA) offers you dollar-for-dollar tax relief, of up to $8,000 annually. Making cash top-ups to your loved ones’ SA gives you an additional $8,000 in tax relief.
With up to 6% interest per annum for your SA, consider topping up early in the year. If you kick off in January instead of waiting until December, you could earn up to 20% more interest on your top-ups in 10 years. That’s the power of compound interest, gradually building towards a worry-free retirement.
Similarly, contributing up to $15,300 annually to your Supplementary Retirement Scheme (SRS) account provides dollar-for-dollar tax relief. Tax relief comes into play when you start withdrawing your SRS funds at 63, as you only pay taxes on 50% of your withdrawals for the next 10 years. Whereas, withdrawing from your CPF is fully taxable.
Imagine contributing $8,000 to your parent’s SA, $8,000 to yours, and $15,300 to your SRS – that’s a potential tax relief of up to $31,300.
With LytePay, you can access your commissions any time to top up your family’s and your CPF promptly. Beyond having more cash on hand, LytePay empowers you to strategically manage your finances, making moves like SA top-ups at the most opportune times.
Receive as You Give to Charities
Giving back to society not only feels good, but also good on your wallet. Donations to these approved charitable institutions come with a tax deduction of 250% on the donation amount.
For instance, a $5,000 donation means a $12,500 tax reduction.
Remember, donations must be made in the year before the year of assessment. This means if you want to lower your 2024 tax, the donation has to be made in 2023.
If you are in a high-income bracket, making donations is one of the most effective ways to bring your taxable income to a lower bracket.
Parent Relief Scheme
If you have supported your parents financially, you could be eligible for the Parent Relief scheme. This grants you a tax reduction of up to $9,000 per dependent staying with you.
It’s a win-win for family bonding and tax savings!
Upgrade Your Skills by Enrolling in A Course
Continuous learning is your secret weapon in the real estate industry. The Course Fees Relief Scheme allows you to claim up to $5,500 in tax relief when you enroll in a course relevant to your job.
It’s an investment in yourself that pays off in more ways than one.
If you’ve served in the Singapore Armed Forces, your service doesn’t go unnoticed.
Depending on your key appointment holder (KAH) status and NS duties performed in the previous year, you may be eligible for tax reliefs ranging from $3,500 to $5,000. Non-KAH NSMen can also enjoy tax reliefs of up to $3,000.
Plus, your spouse and parents will automatically receive $750 in tax relief as our government’s appreciation for their support.
Working Mother’s Child Relief (WMCR)
Juggling between family and work is never easy. Thankfully, the government supports working mothers through the Working Mother’s Child Relief.
For children born or adopted before 1 January 2024, the relief is a percentage of your earned income – 15% for the first child, 20% for the second, and 25% for the third and beyond. This means if you have 5 children, you may claim up to 100% of your earned income!
For children born or adopted after 1 January 2024, the relief is a fixed sum – $8,000 for the first child, $10,000 for the second, and $12,000 for the third and beyond.
Check Your Earned Income Expenses
As a real estate agent, keeping tabs on your expenses is crucial.
Record costs related to transportation, entertainment, renovation, and any other work-related expenses – they might be deductible.
Safeguard Your Commissions for Expenses that Matter More
As a real estate agent in Singapore, navigating the tax landscape might not be your favourite part of the job, but it’s a crucial one.
Having access to your commissions anytime with LytePay adds an extra layer of financial flexibility. This empowers you to take advantage of investment opportunities and execute strategic tax relief methods throughout the year.
It’s not just about trimming your taxes, but also safeguarding your financial future.