Individual Income Tax Season 2023 Singapore

Individual Income Tax Season 2023 Singapore

Individual Income Tax Season 2023 is here. The period that you can file your income tax will be from 1 March 2023 to 18 April 2023. There will be some changes this year which will only be affecting the top 1% of Singapore which I will be sharing below.

Individual Income Tax Season 2023 Singapore
Individual Income Tax Season 2023 Singapore

Introduction to Income Taxes

We pay a certain amount of income taxes to Singapore every year as contribution. They are used to fund public services, pay government obligations, and provide goods (think about the roads and traffic lights or even our military force) for citizens.

We are taxed on our income and it is a progressive tax nature. This means that as you earn more, you will taxed at a higher rate. This doesn’t mean you should relax and earn less. I would rather you earn more and get taxed more. It is a happy problem. (Would you like to earn $30,000 and be taxed $200 or earn $1,000,000 and be taxed $199,150? I will take the latter at any time)

Income Tax Rates 2023

Singapore Budget 2022 Effective Income Taxes
Singapore Budget 2022 Effective Income Taxes

As communicated in the Budget 2022, there will be a new income tax brackets after $320,000. Fortunately, it will probably only affect the top 1% of the population.

If you feel that you are paying for high taxes, you would like to know that there are certain contributions to SRS that can help to reduce your income taxes. If you haven’t done so, you might want to consider doing it for this year.

You might be on the No-Filing Services (NFS) and Auto-inclusion Schemes. This will make your life even more simpler.

Final Thoughts By Wealthdojo

Thank you for your contribution to nation building. Please always refer to the IRAS website for information related to tax issues.

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

My SRS Portfolio Dec 2022

My SRS Portfolio and Thoughts [Dec 2022]

Congratulations for clearing 2022! 2023 just started. I’ve a good feeling that this year will good to my SRS portfolio. If you need a quick recap, check out my top article for Dec 2022: what happen to the stock market from 2019 to 2022.

Again, if you are new to SRS, please start here.

Disclaimer: This article is not and should not be taken as a buy/sell/hold recommendation.

My SRS Portfolio Dec 2022
My SRS Portfolio Dec 2022

My Thoughts and Consideration

SRS Portfolio Tracker Dec 2022
SRS Portfolio Tracker Dec 2022

SGX:HST looks like it is finally recovering. I believe this is because China is reopening on 8 Jan 2023. They are more relax when it comes to COVID-19 testing and seems like lockdowns will be unlikely. China will be living with COVID-19. While I expect there will be short-term COVID-19 spikes and some disruptions, productivity will pick up soon after. Currently, there is no intention to add more position into SGX:HST.

SGX: BTOU is the most disappointing position in the portfolio. While Manulife  have pivoted and shifted into hotelised buildings and provide flex office solutions, there are several concerns to that SGX: BTOU have to address.

I believe there will be some divesting to reduce aggregate leverage in the next few quarters. Overall, these are all bad news to SGX: BTOU. Therefore, there will be no second entry into SGX: BTOU.

SGX: ME8U is a new entry into the SRS portfolio. I have receive first dividend payout from it and looking forward to the further dividends to come.

I have also embarked into dollar cost averaging into the S&P500. More to be added into this space in the articles to come.

Final Thoughts

It isn’t all sunshine for sure. Take care and hope you are well.

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

My SRS Portfolio March 2022

My SRS Portfolio and Thoughts [March 2022]

My SRS Portfolio March 2021
My SRS Portfolio March 2022

What an epic start to 2022. In just one quarter we are now in the amidst of the Perfect Long Storm, Russian-Ukraine Tension and Will Smith slapping Chris Rock. Maybe the saving grace is that we will be able to travel to Malaysia (with more freedom) from 1st April.

In any case, this is the SRS update for March 2022. If you are new to SRS, I would encourage you to start from my most read SRS article, 5 Things You Need To Know About SRS to begin.

Disclaimer: This is not and should not be taken as a buy/sell recommendation.

My Thoughts And Consideration

My SRS Portfolio and Thoughts [March 2022]
My SRS Portfolio and Thoughts [March 2022]
The most glaring underperformance continues to be my exposure into Chinese Technology Stocks (SGX:HST). The price is already 41% down since the last time I entered. The question I get asked frequently is how will China do moving ahead.

According to Political Bureau of the Communist Party of China (CPC) Central Committee meeting on Dec 2021, the focus on 2022 will be prioritize stability while pursuing progress. This is a great difference from their focus of strengthening antimonopoly rules in 2021. I believe this might be a turning point and am considering a Dollar Cost Averaging into SGX:HST. This is after a capital injection into the SRS for tax purpose.

Final Thoughts

I reemphasize again that this is not and should not be taken as a buy/sell recommendation. Wishing you all the best!

 

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

There were only two things certain in life Death and Taxes

Individual Income Tax Season 2022

It is the time of the year again. Last year, I wrote about whether an individual is required to pay taxes and my opinion of effective income tax in Singapore. This year, I will simply comment on the latest happenings and what you should take note of.

Disclaimer: Please refer to IRAS Website whenever in doubt.

There were only two things certain in life Death and Taxes
There were only two things certain in life Death and Taxes

Year Of Assessment 2022

The filing for YOA2022 have started on 1st March 2022. We will have until 18 April 2022 (*very important date*) to e-File our income taxes.

How To Reduce My Income Taxes Effective Income Tax Rates
How To Reduce My Income Taxes Effective Income Tax Rates (From YA 2017 to YA 2023)

Income tax rates will remain the same until YA2023. Thereafter, there will be changes for people earning > $320,000 as highlighted in the Budget 2022.

This year, it is stated that 7 out of 10 taxpayers in Singapore will not be required to file a tax return as there have been initiatives to simplify tax filings. This includes No-Filing Services (NFS) and Auto-inclusion Schemes. Partnerships whose revenue of up to $200K will only need a 2 line statement as compared to 4 line previously.

It is worth noting that you can make changes to your income or reliefs by making an amendment on the IRAS portal 30 days from date of tax bill. Any excess taxes can be refunded by PayNow.

Final Thoughts

Think about your Netflix subscription and you are buying their library of movies. I consider individual income tax as a subscription that I pay to stay in my country. I’m paying for my safety, the public goods and mainly the comfort to live in Singapore even if the perfect storm is coming.

I like the progressive income taxes system in Singapore but I’m like most of you, it is not fun paying taxes.

I wish you the best in your financial journey. Hope to hear from some of you. I will be arranging for a CPF webinar in the weeks ahead. Please leave a comment below if you wish to be updated on the details of the webinar.

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

3 Key Changes To CPF Policies From 2022

3 Key Changes To CPF Policies From 2022

January is the month where many people are interested in the CPF. I believe this is because we usually set our life / financial / career goals for 2022 at the start of the year. For those of you who have financial goals, I welcome you to Wealthdojo and hope that this website will be a good resource for you.

3 Key Changes To CPF Policies From 2022
3 Key Changes To CPF Policies From 2022

This article will only highlight 3 2022 CPF Policies updates. If you wish to look at all the other changes that was announced in Nov 2021, you can take a look here.

#1: Basic Retirement Sum (BRS) / Full Retirement Sum (FRS) / Enhanced Retirement Sum (ERS) Updates

The CPF retirement sum is a moving target because of inflation. This is to ensure that CPF payouts will be sufficient during our retirement years. For 2022, the amount in BRS, FRS and ERS are $96,000, $192,000 and $288,000 respectively. If you are turning 55 this year, these numbers will be relevant to you.

#2: Basic Healthcare Sum (BHS) Updates

In 2022, the BHS will be $66,000. This is the estimated savings needed for basic healthcare for old age and is adjusted yearly until the age of 65. This will be fixed for the rest of your lives. If you are turning 65 this year, this number will be relevant to you.

#3: Increase in CPF Top Up Tax Reliefs Updates

You may enjoy tax relief of up to $8,000 if you may a top up for yourself and an additional $8,000 if you make a top up for your loved ones. However, the $8,000 tax relief cap is now shared between Special Account (SA), Retirement Account (RA) and the MediSave Account (MA).

This update has posted the most concerns and I believe this will affect a specific group of individuals which I will explain later.

To understand this, we have to take a step back and look at how top ups were done before 2022 especially MA Top-ups.

Before 2022, topping up MA is a popular tax relief option together with Retirement Sum Top-Up (RSTU). It depends on 2 factors.

  • The difference between the CPF Annual Limit ($37,740) and the CPF contributions made for the calendar year
  • The difference between the BHS and current MA balance

I will be illustrating using an example of Mr Goh (age 25) with a salary of $10,000 monthly with no bonus. As he is young, we can safely assume that his MA amount is way below the BHS. As the the Ordinary Wage ceiling is capped at $6,000 currently, his annual CPF contribution will be the following.

A: Annual CPF Limit: $37,740

B: Annual CPF Contribution: $6000*12*0.37= $26,640.

C: Eligible VC-MA Top-up amount: A – B = $11,100

D: Max RSTU Top-up limit before 2022 = $7,000

E: Total Eligible Tax Relief: C + D = $18,100

As you can see, it is slightly more complicated to calculate tax-reliefs previously.

After 2022, it is very simple. $8,000 tax relief cap is now shared between Special Account (SA), Retirement Account (RA) and the MediSave Account (MA). This means for Mr Goh, his eligible tax relief decreased by $10,100 ($18,100 – $8,000).

Now that we understand the theory behind it, let’s put things into context.

Personally, I think this will not affect most of us. This is because the median income for Singaporeans is $4,534 in 2020 including CPF contributions from employers. It is an income where tax is rather manageable (in my opinion) and you might not consider to contribute to CPF for tax purposes. I do understand that some of you might be attracted to the interest rates from CPF, feel free to contribute at your discretion.

The group that I believe will be affected are the high income young individuals. At that income level, you might be looking for ways to have tax-reliefs such as SRS Top-ups to reduce your taxes.

Final Thoughts

The journey of your financial freedom begins with the first step. Congratulations for reaching the end of the article. I hope to see and hear (write down your thoughts in the comments below) from some of you in 2022.

Take care.

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.