Managing your income tax bill

Tax-filing season may be over but the responsibility of ensuring you filed your tax returns correctly and make prompt payment lies with you. The Sunday Times highlights what you need to look out for after filing your returns.

If you filed your tax returns by April 18, you are among the 96 per cent of taxpayers who met the deadline this year. It is a commendable effort but perhaps even more striking is that around 97 per cent of those who filed on time did so electronically. About 27 per cent used mobile devices such as smartphones or tablets to access myTax Portal to handle their returns on the go.

This year, 212,000 eligible taxpayers, such as those with employment–only income not exceeding $100,000, received an instantaneous tax bill or Notice of Assessment (NOA). The Inland Revenue Authority of Singapore (Iras) sees the early finalisation of assessments as a way for taxpayers to plan their finances ahead of time with greater certainty on their tax payments. Those who did not get an instantaneous NOA will receive their tax bills by September. Taxpayers who have lodged their mobile numbers with the Iras will get SMS alerts when their tax bills are ready.

Here are three steps to take after filing your tax returns.

Step 1: Receive your electronic tax bill

Millions of individual income tax bills are mailed to taxpayers every year, but now more of us will be receiving only electronic notices instead of paper versions. This digital initiative aims to deliver greater convenience, security and timeliness to taxpayers. If you want to get an electronic tax bill, set your e–Notice preferences on myTax Portal.

Step 2: Check your tax bill and file objections online

If you disagree with the tax assessment, you can file an objection on myTax Portal using the “Object to Assessment” e–service. This allows you to easily amend the pre–filled values on your original tax assessments, such as income figures and relief claims.

Step 3: Make payment electronically

You must pay your tax bill within a month of receiving it or face a 5 per cent penalty. If payment is still not made, an additional 1 per cent penalty may be imposed each month up to a maximum of 12 per cent of the tax outstanding. Cashless payments have gained a lot of momentum here, so much so that cheque collections for taxes are no longer accepted at SingPost branches.

You are encouraged to use cashless or electronic payment modes such as Giro to settle your tax bill. If you pay via Giro, you may enjoy up to 12 monthly interest–free instalments. If you incur the 5 per cent late payment penalty, pay the overdue amount immediately before appealing for a waiver of the penalty if you have valid reasons. Appeals can be made online via the “Request Penalty Waiver” e–service at www.iras.gov.sg (e-Services Individuals).

You can also appeal for a waiver of late payment penalties through the “Enforcement helpline” at 6356–7012 when this service is available by the year end.

How to check your tax bill

A tax bill shows the types and amount of income being taxed, deductions claimed and the amount of tax you owe. Tax bills are computed based on the returns you submit or on the income and relief information sent directly to the Iras by the relevant organisations and the reliefs you claimed last year.

Here are three things to look out for when you check your tax bill.

1. Income

All income earned in or derived from Singapore is taxed, unless specifically exempted. To stay compliant and avoid penalties, check that you have declared the various sources of your income, such as:

• Employment;
• Trade, business, profession or vocation;
• Rent from property; and
• Other sources such as royalties.

Commonly made mistakes include entering the wrong income information or not declaring commission or rental income you received last year. In some cases, taxpayers may wrongly assume that their employers have submitted their income information to the Iras on their behalf and fail to declare their income in their returns.

If you want to correct income information, you must clarify the type and nature of the income to be included – whether it is salary, bonus or allowance – as well as the exact amount.

2. Expenses

If you are a sole proprietor or are self–employed, you may incur expenses in the course of running your business. Ensure that the amounts you claim are allowable expenses and do not include personal or private costs that do not relate to your business.

Expenses must be supported by complete source documents that should be kept for at least five years. If you have made an error in reporting your expenses, declare the date, nature and purpose of the expenses incurred when you file an objection.

3. Tax reliefs

You may have forgotten to claim tax reliefs such as Parent Relief and Child Relief. Or you claimed reliefs to which you are not eligible. Common errors include not removing Child Relief from the tax return when you are no longer eligible, such as when your child has income exceeding $4,000 last year.

If you find yourself in either scenario, you can make a correction by filing an objection. If you want to claim tax relief, ensure that you have met all the qualifying conditions. You can log in to the portal using your Singpass to retrieve tax statements or e–file your returns via mytax.iras.gov.sg

^{Source: The Sunday Times Singapore Press Holdings Limited. Permission required for reproduction.}

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