You will be able to keep the records that support your claims and act before the year ends.
On 29 December last year, Shu Ting's manager Raymond was on leave, half packed for a family trip to Penang, when he remembered the CPF top-up for his father. He made it from his phone at the airport and spent the flight wondering whether it had reached the CPF Board in time. It had, just. When he told the story at lunch, Shu Ting resolved that her own first top-up would not be done that way.
This lesson covers two habits that make tax season dull, in the good sense: keeping the records that support your return, and a short check each December that catches anything that has to happen before the year ends.
Every figure on your return should trace back to a document you can find. IRAS can ask about a return after it has been assessed, and it can ask you to show that you qualified for a relief. It sets how long you must keep records, and the period is on its website. Keep them at least that long.
For most employees, the records fall into five groups. Income: payslips, the IR8A and its appendices, and statements for any income outside your job. Reliefs: whatever shows you met each condition, such as proof that a parent lives with you, bank transfers for an allowance, or a child's birth certificate. Rental income: the tenancy agreement, records of rent received, and receipts for each expense you claimed. SRS and CPF: statements showing each contribution or top-up and its date. Donations and anything else claimed: receipts and the confirmation from the charity.
Paper or digital doesn't matter, as long as you can produce them quickly. A folder per tax year, with a subfolder for each group, works. So does a cloud folder with the same structure, as long as the scans are readable.
Shu Ting's folder for this year already held her payslips, the tenancy agreement and rent records for the room, receipts for the room's expenses, her mother's address details, the monthly transfer records and her donation receipts. Two empty subfolders were waiting for the CPF top-up confirmation and the SRS statement.
A few things only count for a year of assessment if they happen by 31 December of the year before. SRS contributions, CPF cash top-ups and donations all count for the year in which they are made. A top-up on 2 January lands a year later than one on 31 December, as lesson 3.1, Tax relief on CPF cash top-ups, showed.
Some of these also need time to process. The CPF Board and the SRS operator banks publish year-end cut-offs for each payment method, and what counts is the date the money arrives. Leaving it to the last week of December, when banks have holidays and you may be travelling, is how people miss a year.
Reliefs follow your circumstances in the calendar year. So December is also a good time to ask what changed this year.
Did you marry, or did your spouse start or stop working? That affects Spouse Relief. Did you have a child, or did a child leave school or start earning? That affects the child reliefs from lesson 2.2. Did a parent move in or out, pass away, or start earning more? That affects Parent Relief from lesson 2.3. Did you start or change jobs, begin renting out a room, or start a side income? Those change what you'll need to declare.
Also check for reliefs that have ended. IRAS removes reliefs from time to time. Course Fees Relief, for instance, has lapsed, so fees for a course you take now won't reduce your tax. Your relief list from lesson 2.5, List every relief you qualify for, should drop anything that's gone.
Put a recurring reminder in your calendar for the first week of December. When it comes up, spend half an hour on five questions:
Have I made any top-up or SRS contribution I decided on, with time to clear the cut-off? Did anything in my life change this year that adds or removes a relief? Has anything happened that I'll need to declare, such as rent, side income or a new job? Are this year's records in this year's folder? Are any reliefs shared with family, and have we agreed who claims them next year?
Shu Ting's reminder now sits on the first Saturday of December. Top-ups and SRS go in that weekend, well clear of the cut-off, and the rest of the check takes her about twenty minutes with her workbook open.
For the activity, set up this year's records folder now and put your December reminder in your calendar.
Set up a folder for this year's tax records and a calendar reminder for your year-end check.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).