5 Mistakes to Avoid When Filing Income Tax in Singapore

Filing tax returns can be complicated and stressful. One wrong number can lead to future hassles. It’s not uncommon for errors to be made when filing income tax in Singapore, but avoiding these costly errors will save you a lot of time and money.

The most common mistakes are the ones that filers should never make – they’re errors that are easy to correct.

1.     Not Filing Tax Returns

You sit down, start doing your tax returns, and realize that your employer has submitted your income details to the IRAS. Mistakingly, you assumed that you do not need to file your income taxes as a result.

Even if your employer has filed your income details, you need to e-File your return unless you’ve receive your No-Filing Service Letter (NFS). There is also the chance that you may have received income from other sources, and it is the responsibility of every individual to ensure that their Notice of Assessment (NOA) is accurate.

Filers have 30 days from the receipt of delivery to inform the IRAS of the error.

There are circumstances where you’re not required to file tax returns:

  • If you earned annual income, derived from Singapore, that does not exceed $22,000, and/or
  • If you earned net business income of under $6,000 that was derived from Singapore

If you exceed any of these amounts, you will need to file your income tax return.

2.     Improperly Declaring Income

Declaring income in the Other Income section is inaccurate in some circumstances. A person that conducts business or a trade, even if it is not their primary income, must file this income under the item that states “Trade, Business, Profession or Vocation.”

A good example of this would be a person that offers computer repair as a way to earn additional income.

3.     Not Reporting Rental Income

Income tax includes money that was acquired through rental properties. All filers must include the net amount of their rental after. There are allowable deductions that can be made, and you will be taxed on the net amount minus any allowed expenses in accordance with the IRAS.

Singapore allows you to deduct most expenses that are incurred to produce rental income.

A few of the many deductions that can be made as of 2016 include:

  • Interest paid on a loan or mortgage to purchase a rented property.
  • Property tax that was incurred during the rental period.
  • Fire insurance premiums.
  • Repairs done on the property during a rental period.
  • Maintenance of the property, such as pest control and painting. You may also deduct maintenance charges given to management corporations.
  • Costs associated with getting the rental property occupied, such as agent commissions.
  • Management or supervision costs related to the property.
  • Furniture hiring or replacement of furniture, fixtures or appliances to bring the property back to its original state.
  • Internet and utility charges paid on behalf of the tenant. These charges must not have been reimbursed by the tenant.

All rental income must be included on personal tax returns.

4.     Declaring or Not Declaring Overseas Income

Overseas income is generally not taxable, and doesn’t need to be declared. But there are some circumstances wherein you’ll need to file overseas income:

  • Income was derived from partnerships in Singapore
  • Your overseas work is part of your work in Singapore
  • You’re employed with the Singapore Government and conducting work on the government’s behalf overseas
  • You received service income from overseas
  • Your business or trade is conducting business overseas that is part of your Singapore trade

These are the few times in which your tax returns must include overseas income.

5.     Not Claiming Reliefs

Many filers are under the assumption that since reliefs were claimed the previous year, reliefs do not need to be claimed on the current year’s taxes. The reliefs are not automatically included in future assessments.

The exception is if the relief was included within your Income, Deductions and Relief Statement (IDRS) when e-Filing.

All paper filings need to ensure that reliefs are claimed. In the event that relief amounts have not changed from year-to-year, the amount will still need to be included.

When e-Filing, you can make changes to the pre-filled information by selecting “I need to edit my Tax Form.” This will allow you to access the main tax form and change any figures as necessary.

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