5 tips for stress-free tax filing for married couples and families
For every married couple who is happy with fur-kids, there are some who treat parenthood as a rite of passage to becoming a real family. Mr and Mrs Lee, working professionals in their 30s, with their two toddlers, form a picture-perfect portrait of a happy Singaporean family.
“Our children enjoy going out for walks and water play,” said the couple who count Gardens by the Bay, Singapore Zoological Gardens and nature parks amongst their weekend destinations.
The young family plays hard and works hard both at the workplace and at home. Mr Lee, a public servant, is a modern-day dad who ably manages the active toddlers on his own. His accountant wife praised his hands-on parenting style: “He is very hands-on and is able to care for the children on his own, allowing me to rest.”
Of course, it is not all sunshine and roses as managing two active toddlers is no walk in the park for the busy couple. However, the young family is managing well as Mr and Mrs Lee are able to rely on a strong support network of outsourced and family help. The two-year-old boy goes to a childcare centre while his younger sibling, a one-year old girl, is looked after by Mrs Lee’s home-maker mother.
Even with the tax-filing season in full swing, the active young family is in chill-mode as tax-filing is a non-event for mum and dad. Here are 5 tips for married couples for a stress-free tax filing experience:
Tip 1: File early and be organised
Filing season starts on 1 Mar every year. Tax filing is a simplified event for 8 in 10 taxpayers as their employers submit their income information to IRAS under the Auto-Inclusion Scheme. Making it even easier is the No-Filing Service (taxpayers will be notified via SMS or letter if they are on NFS) which means that you do not even have to file a tax return. All you need to do is to check that the pre-filled income and relief information is correct. Read about simplified filing for taxpayers.
Tip 2: Know your reliefs
There are a total of 18 reliefs which individuals an tap on to reduce their income tax bill. The total amount of reliefs which taxpayers can claim is capped at $80,000.
Married couples and families enjoy certain reliefs which help to defray the cost of starting and raising their families.
Tip 3: Agree on how to share
Couples adjust to married life through open communications and learning to care and share. Some reliefs are claimable by both mum and dad so couples can have a frank discussion on how to split these reliefs.
Agree on how to share the Qualifying Child Relief (QCR)/Child Relief (Disability) and Parenthood Tax Rebate. You can claim tax relief of $4,000 per child under the Qualifying Child Relief, or $7,500 per child under the Handicapped Child Relief. For the Parenthood Tax Rebate, parents can claim tax rebates of up to $20,000 per child. You can claim $5,000 for your first child, $10,000 for your second child and $20,000 for your third and subsequent children. Any unutilised Parenthood Tax Rebate can be used to offset your income tax payable in subsequent years until it is fully utilised.
Tip 4: Know what’s for mum only
Working mothers have special privileges as there are three reliefs that are just for them. The Working Mother’s Child Relief, Foreign Domestic Worker Levy Relief and the Grandparent Caregiver Relief incentivise them to stay in the workforce.
Tip 5: Setting aside a budget for tax payment
Balancing the dollars and cents is part and parcel of marriage and parenthood. Be sure to plan for the tax bill when doing the figures for your family budget.
Take advantage of IRAS’ GIRO plan for interest-free monthly payments over 12 months or a one-time deduction. Learn about other payment options.
Sometimes, families go through tough times. If the breadwinner has lost his job or suffered a substantial drop in income, or the family is struggling with a high medical bill, reach out to IRAS before the payment due date. We will work out a suitable payment arrangement with you.
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With an abundance of nature parks and attractions, Singapore is one of the best places to bring up a young family. Add to that the government’s assurance to create a pro-family environment and progressive tax policies. Any wonder then that the Lees are basking in the sunshine with their young toddlers.