For years, I had been really careless with money, negligent even. C'mon, with the hassle of work during term time, the calm respite during the holidays are sacred! Yet bills will shock us when we receive our income tax come June 2017.
We have to equip ourselves with financial literacy! Did some reading up these past week to start getting myself back to financial health. Mental and emotional health has been taking a toil for pretty much of 2016, so has financial health in the past... 6 years of working life! Time to bounce back, one step at a time. Really, while everyone's busy holiday-ing, take a long hard look at the impending taxes that will come your way in 2017.
Depending on the income bracket that you are in, you'll effectively be giving the the government $200 (If you are the starting out working), $550 (If you have slogged for some time), $3350 (If you you've worked almost a nearly a decade in civil service, or you are qualifying for any remuneration packages at specific years) and you get the drift. So really, check out your taxes for 2015 to get a reference point of how much you have been paying.
CPF Medisave Account can be used for payment to many different medical and outpatient bills. Recently, I have paid for my wisdom teeth extraction through Medisave and it cost about 1k.
I also use my Medisave to pay for both my parents and my own hospitalization rider, which amounts to a yearly total premium of about 1k. (These premiums qualify for tax relief.)
On top of that, my mum uses Medisave for her diabetic outpatient bills, capped at $200 a year, sufficient to pay off her medications and consultations.
So you see, Medisave can be utilized more flexibly compared to CPF Ordinary account and Special Account (where your money is locked away until you are 55 years). The amazing thing is:
If you top-up cash into you Medisave Account - capped at $7000, you will get $7000 tax relief for 2016.
And you can also top up for your parents' Medisave Account - capped at $7000, for another $7000 tax relief.
For me the equation is plain, if you top up for yourself and your loved ones, you could potentially be saving from tax amounting to:
$200, $350, $980, $1600 etc. (That is a lot the government draws from our hard earned money!)
On top of saving on your taxes, you earn 4% p.a interest for the cash-up for CPF. Well, topping up my mum's Medisave gives me a peace of mind should any health-related crisis happens. And even when she passes on (before me) it goes back to my CPF, and if she passes on after me, I can be assured she is taken care of with the annual CPF top-up. And of course, for sure these money will go to my family members instead of flowing back to the government. (别让羊毛出在羊身上！）
With so much to learn and discover. I am getting moving!
For further reading on reducing taxes, click here.
We have to equip ourselves with financial literacy! Did some reading up these past week to start getting myself back to financial health. Mental and emotional health has been taking a toil for pretty much of 2016, so has financial health in the past... 6 years of working life! Time to bounce back, one step at a time. Really, while everyone's busy holiday-ing, take a long hard look at the impending taxes that will come your way in 2017.
#1 This is how we are going to be taxed for this year's earning:
 |
| Via IRAS Website |
#2 Top-Up your Medisave or your loved ones' Medisave to get tax relief.
CPF Medisave Account can be used for payment to many different medical and outpatient bills. Recently, I have paid for my wisdom teeth extraction through Medisave and it cost about 1k.
I also use my Medisave to pay for both my parents and my own hospitalization rider, which amounts to a yearly total premium of about 1k. (These premiums qualify for tax relief.)
On top of that, my mum uses Medisave for her diabetic outpatient bills, capped at $200 a year, sufficient to pay off her medications and consultations.
So you see, Medisave can be utilized more flexibly compared to CPF Ordinary account and Special Account (where your money is locked away until you are 55 years). The amazing thing is:
You get the same 4% interest for Medisave, same as what you get for Special Account, but it gives you flexibility of utilizing for healthcare!
And you can also top up for your parents' Medisave Account - capped at $7000, for another $7000 tax relief.
For me the equation is plain, if you top up for yourself and your loved ones, you could potentially be saving from tax amounting to:
$200, $350, $980, $1600 etc. (That is a lot the government draws from our hard earned money!)
On top of saving on your taxes, you earn 4% p.a interest for the cash-up for CPF. Well, topping up my mum's Medisave gives me a peace of mind should any health-related crisis happens. And even when she passes on (before me) it goes back to my CPF, and if she passes on after me, I can be assured she is taken care of with the annual CPF top-up. And of course, for sure these money will go to my family members instead of flowing back to the government. (别让羊毛出在羊身上！）
# Cash-Up soon!
In order to qualify for the tax relief, you have to settle the cash up before 31st December. And there is a daily withdrawal limits so you might have to do so over a span of few days. You would also be required to log into your CPF account to perform the Cash-up. This means you have to get your Singpass and 2fA ready. (If you have neither, it can take anyway from 2 days to 2 weeks to obtain both)With so much to learn and discover. I am getting moving!
For further reading on reducing taxes, click here.
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