It can be complicated to file your taxes, but if you know the various ways in which you can get tax relief, half of the pressure will be eased. Also, planning and tax savings are key to handling the finances ahead of time. There are different fields in which tax relief can be claimed and getting a good understanding can help make it easier for you. For foreign executives, here are the strategies to decrease your Singapore tax bill. Know the taxation of foreign executives.
1. Make donations that are social.
When you donate to charity, everyone profits. Cash contributions to eligible charities will minimize your taxable income by up to 50% of your adjusted gross income (AGI).
Up to 30 percent of your AGI can be decreased by non-cash contributions. This makes special sense if you buy low-cost securities because you would earn a fair market value allowance and stop paying tax on unrealized gains.
2. Ensure that you receive tax relief for expenses
This would save you a 20 percent minimum of tax relief. Do not forget to also demand a refund of any expenses incurred directly that are “fully, entirely and obviously” obtained in the course of your duties, such as mileage, professional subscriptions, and hotel expenses that you may have personally compensated for. Company-owned cell phones, childcare costs, and related life insurance plans are other tax-efficient expenditures to consider. Claiming this will allow you to derive tax-free income from your company, saving you up to 40 percent of the cost. If you are uncertain as to whether an expense is appropriate, remember to seek advice from your accountant.
3. Financial products
The absence of benefits like life insurance and pensions is one of the perceived drawbacks of working as a limited business contractor as opposed to a full-time employee. You can set up these incentives for yourself as a company owner, several contractors have a company pension plan that not only helps to prepare for retirement but is also a tax-efficient way to extract company income. Moreover, in the industry, many life insurance policies are tax benefits. The Financial Service specializes in offering advice on these product forms.
4. Register for Rental Property Deductible Expenses
Rental income, or rental property revenue, is taxable in Singapore. However, under applicable circumstances, to cover your rental income tax, you can report rental expenses. Different types of deductible expenditures can be used. Such examples are property tax, mortgage payments, fire insurance, handling body maintenance payments, or general costs of repair and maintenance.
When it relates to how to minimize taxes, if you take advantage of incentives and advantages that are out there, you will reduce the amount of taxes you pay. It is up to you (and your tax advisor) to find new ways for your small company to lower taxes. As you reach 2020, this is highly important. This year and into the future, the movements that you make now will potentially save you large sums of money.
Director of Novage Singapore