Saving tips - part 1

Having a new role as the CFO of the household, 笨mummy needs to improvise and learn a few new tricks to manage her expenses well. Here are some of the "tricks" she picked up in the recent weeks for sharing. 

1) Looking out for samples before checkout

Before she checkout of her groceries shopping on online websites, such as Redmart and  Fairprice online, 笨mummy would always do an additional step to search for the keyword "sample" to see what items are being offerred as samples for 笨mummy to pick up before she completes her shopping. 

In the recent shopping on Redmart, she had picked up 

• A Nescafe Gold Latte Coffee Sample pack for S$0.25 which consists of 4 packs of the Nescafe Gold Latte Coffee (which a packet of 12 could cost around $6.50).
• A sample 370g tin of Enfagrow A+ Gentlease stage 2 stage for Child 2 at $0.10. This is a real bargain considered how expensive milk powder can be, and being, older and starting to weaning, Child 2 has no problem drinking milk powder from other brands)

Below is a printscreen of what are offered on Redmart that you can find: 

2) Qoo10 Gift card

As a regular shopper on Qoo10, it is only now that 笨mummy discovers the gift card. Qoo10 allows a shopper can actually buy gift card of $100 value on Qoo10 at a discount of 3%. If you are a regular buyer, like 笨mummy, you can actually save $3 for every $100 you spent when you purchase the gift card and use the gift card to top up your Q Money. 

That's all 笨mummy has to share for now. If anyone has any saving tip, do share with her. Saving is caring. :)

How to minimise individual income tax for a working couple

Although Singapore’s tax rate is one of the lowest in the world, 笨mummy hold the belief that one should aim to pay his/her fair share of tax and claim all the reliefs that one is entitled to. As a working couple, 笨mummy always need to take into account of her hubby’s income and reliefs as well as hers when preparing the individual income tax filing as to minimise the tax payable for them as a couple.

Here are her workings in computing the prefect combination of reliefs to be split between the couple to achieve the lowest tax payable possible:

• Step 1: List down the income of both couples as well as the tax reliefs available. This can be easily extracted from the draft form B1 when you log in the IRAS tax portal. 

• Step 2: Identify the “non-shareable” reliefs and the “shareable” reliefs. Non-shareable reliefs are those that are only allowable to a particular person, for example, working mother child relief is allowed to the mother (i.e. the wife), while earned income relief, CPF relief, etc are only allow to that particular individual (i.e. the husband or the wife). While shareable relief can be split and share amongst the couple. 

• Step 3: Compute the chargeable income net of non-shareable reliefs

• Step 4: Split the shareable reliefs according to the highest marginal tax rates

Here is an example for illustration of how the above work:

Assuming both husband and wife are working and they have one child. The wife would be entitled to the working mother relief which is 15% of her total income. 

INCOME		Husband	Wife
Employment income		100,000	100,000
Other income		-	-
TOTAL INCOME		100,000	100,000
DEDUCTIONS AND RELIEFS
Non-shareable reliefs
Approved Donations		68	65
Earned income relief		1,000	1,000
Working mother's child relief		NA	14,990
Grandparent caregiver relief		NA	3,000
CPF/provident Fund relief		17,000	16,000
Course fees relief		-	-
Foreign maid levy relief		NA	-
CPF cash top-up relief		-	-
Supplementary Retirement Scheme (SRS) relief		-	-
NSman(Self/wife/parent) relief		1,500	750
TOTAL NON-SHAREABLE RELIEFS		19,568	35,805
Shareable reliefs
Qualifying child relief	4,000
Parent relief	0
Net chargeable income net of non-shareable reliefs		80,432	64,195
Husband tax rate		Amount	Tax rate
		20,000	0%
		10,000	2%
		10,000	3.50%
		40,000	7%
		432	11.50%
		80,432
Wife tax rate		Amount	Tax rate
		20,000	0%
		10,000	2%
		10,000	3.50%
		24,195	7%
		64,195

As in this example, the amount of $432 of husband attracts the highest tax rate of 11.50%, follows by the $40,000 (Husband) and $24,195 (wife) attracting the second highest rate of 7%. The couple has a few choices of split the child relief: 

1. S$432 to husband and balance to wife, 

1. All $4,000 to husband