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Half of year 2011 has already passed. Have you ever thought of your next tax filing yet ? If you only take a look by next year, then it may be too late for you to optimize anything anymore. Try below widget and see how much the impact may be for you ! Just enter your total annual income and see how much tax you can save simply by planning early !!
Showing posts with label tax. Show all posts
Showing posts with label tax. Show all posts
Tuesday, July 26, 2011
Thursday, July 21, 2011
Income Tax : Plan vs Not, how much difference ?
Income Tax, to plan or not to plan. Or more precisely, plan now before year end or only worry about it when you file tax next year ... How much is the difference actually ?
Says my annual income in 2011 will be $40,000. If I plan well now ie.
- buy a $1,600 life insurance
- pay $5,000 for my parent medication
- buy $1,00 reading materials
- ...
I would most probably end up paying $12 tax. That means I can most probably claim back quite a sum of money depends on how much my monthly tax deduction is.
On the other hand, if I do none of the above to optimize my tax, I will most probably be paying $937 for my tax. That is a difference of $925 !!
Will you be interested to earn or save $925 just by reading article like this to get yourself well aware of how you should spend some of your money which is beneficial to you and your family anyway ?
If you annual income is $60,000 the tax difference btw plan vs not is $1,991
If you annual income is $80,000 the tax difference btw plan vs not is $3,606
| Annual Income | $40,000.00 | |||||
| POTONGAN | Best Case | Min Case | ||||
| 1 | Individu dan saudara tanggungan | 9000 | 9,000.00 | 9,000.00 | ||
| 20 | Insuran nyawa dan KWSP | 6,000 (Terhad) | 6,000.00 | 4,400.00 | 1600 | |
| 2 | Perbelanjaan Perubatan Ibu Bapa | 5,000 (Terhad) | 5,000.00 | 0.00 | 5000 | |
| 5 | Yuran Pendidikan (Sendiri) | 5,000 (Terhad) | 5,000.00 | 0.00 | 5000 | |
| 7 | Pemeriksaan perubatan penuh | 500 (Terhad) | 500.00 | 0.00 | 500 | |
| 8 | Pembelian buku, majalah, jurnal dan penerbitan | 1,000 (Terhad) | 1,000.00 | 0.00 | 1000 | |
| 9 | Pembelian komputer peribadi untuk individu | 3,000 (Terhad) | 3,000.00 | 0.00 | 3000 | |
| 10 | Tabungan bersih dalam skim SSPN | 3,000 (Terhad) | 3,000.00 | 0.00 | 3000 | |
| 11 | Pembelian peralatan sukan untuk aktiviti sukan | 300 (Terhad) | 300.00 | 0.00 | 300 | |
| 12 | Yuran langganan Jalur Lebar | 500 (Terhad) | 500.00 | 0.00 | 500 | |
| 22 | Insurans pendidikan dan perubatan | 3,000 (Terhad) | 3,000.00 | 0.00 | 3000 | |
| 3 | Peralatan Sokongan Asas | 5,000 (Terhad) | ||||
| 4 | Individu Kurang Upaya | 6000 | ||||
| 6 | Perbelanjaan perubatan penyakit yang sukar diubati | 5,000 (Terhad) | ||||
| 13 | Faedah pembelian rumah … | 10,000 (Terhad) | ||||
| 14 | Suami/Isteri/Bayaran alimoni kepada bekas isteri | 3,000 (Terhad) | ||||
| 15 | Suami/Isteri kurang upaya | 3500 | ||||
| 16 | Anak di bawah umur 18 tahun | 1000 | ||||
| 17 | Anak menerima pendidikan sepenuh masa | 1000 | ||||
| 18 | Anak diploma Ijazah | 4000 | ||||
| 19 | Anak Kurang upaya | 5000 | ||||
| 21 | Skim anuiti | 1,000 (Terhad) | ||||
| 36,300.00 | 13,400.00 | $22,900.00 | ||||
| Taxable Income | $3,700.00 | $26,600.00 | ||||
| Tax Saving | ||||||
| Tax Payable | $12.00 | $937.00 | $925.00 |
Saturday, May 21, 2011
A Perfect World
In a perfect world, everyone produce something.
Farmers grow plants, feed chickens, fishermen catch fish, builder made homes etc. So we can sit together at night and enjoy a complete dinner in our nice homes. It was easy to know who is suppose to do what, who produces what.
When there are too many fish caught, it has to be sold out of town. The fisherman doesn't have time to travel that far. So a delivery boy is helping the fisherman. The fisherman save time, hence catch more fishes and therefore its worth him paying the delivery boy. It is a value added chain, so service has become a part of perfect world too where everyone produce something, everyone produce some values.
It gets a bit complicated cause service is not as easy to quantify as materials. But its still ok.
A $1 fish may cost $2 in out of town because there are delivery cost incurred.
Soon more delivery services are needed. It is not easy to decide which of the 100 delivery boys is most reliable. So a manager came and organize a delivery company. The fisherman no longer need to worry about delivery, the delivery company will handle and be 'responsible' for the delivery part. If any single delivery boy does not perform, the company will immediately replace with a better one. Fish still reach destination on time. The fisherman doesn't need to worry a thing. What the management provided is a service on a service, there is still value provided.
Now the fish is $3 in out of town. The manager needs to eat too.
The fisherman's business grow much larger thanks to the great leveraging techniques. One day, the fisherman's primary school friend drop by and have a nice chat with the fisherman, asking the fisherman to let him handle the delivery part. Because he is more trust worthy, that they have known each other for so long etc. The fisherman agreed, perhaps due to the drinks or due to the flowery talks.
The primary school friend simply take orders for the fisherman and pass to the delivery company. Jobs still get done as usual but while doing that, he has raised the fish price to $5 in out of town. He gets $1 just for the deal he made. The fisherman gets $1 extra simply by letting his primary school friend take over the delivery part. The delivery company has nothing to loose.
Now it gets really tricky.
What did the primary school friend produces ?
What value has he added ?
What service has he provided ?
You can't say he has done nothing. He is instead smart, creating something from nothing. Is creativity really worth nothing ? He capitalize his relationship into a real asset.
The fisherman gets more value ( money ), the primary school friend earn something, the delivery company didn't loose anything. So theoretically speaking, the primary school friend has added value to the fisherman and himself. So it doesn't really break the law of perfect world.
The smart you may have already spotted the difference.
But at whose price ? Out of town folks used to pay $3 for a fish. $1 for the fisherman, $1 for the manager to make sure fish reach them on time and $1 for the delivery boy. Now the fish is $5! What is the other $2 for ? Well, that has nothing to do with any value received by the people in out of town. That was just a deal made between a primary school friend and the fisherman. The fisherman and the friend gets the whole $2!
Smart yes, add value to one or two persons yes, nothing wrong was done yes .... but whatever the primary school friend did, should NOT be included in the formula of 'PERFECT WORLD'.
In a perfect world, everyone produce something
FOR EVERYBODY.
Sounds familiar yet ? If not, may be you haven't read about zzzz's GST yet.
This article was suppose to be read in this sequence.
Friday, May 13, 2011
the Magic of GST - reveal !
The "magic" highlighted is everyone pay less and yet the government can earn more, how is that possible ?
- Tax payers will pay less tax
- Industries will save money
- Government can earn more money
First of all, the trick in that statement is 'tax payers'. zzzz has about 27 millions people, only 1 million is paying taxes. So the rest of the 26 millions people who are NOT paying taxes now will be affected once GST is on. Even your underage kid buy a candy tomorrow, GST would have been included (depends on at which level of the distribution channel). So you "MAY BE" paying less tax, but everyone else in your family will be paying GST. Thats why you pay less tax and yet government can collect more, from people around you.
Secondly, not ALL industries will save money. This is a lengthy strategical discussion but in short; industries who optimize and/or shorten their distribution channels will survive, while others who don't will be dead. ( assuming everyone play fair and nice ). So small boys will die off, big boys will take over their market. Who pay the government more money ? Yes, the big boys. So big boys grow bigger and government gets more $.
Lastly, government doesn't really earn more money, at least not now. You see, the biggest income of the country comes from petroleum and this natural resource is going to end soon ( in less than 10 years ? ) So where else can the government continue to get the money from ? Well, what is the biggest asset of a country ? Its people. So GST will diversify the country's income portfolio. In other words, a country that live on GST income is self sufficient ie. the people are keeping their own country alive. Sounds nice isn't it ? Again, assuming everyone play fair and nice ya.
The panic of general public is only valid if one day we lost the income from petroleum and the similar income is projected into GST directly. I haven't done any calculation yet but I wouldn't be surprise that will be equivalent to 80% GST. So what will happen in coming near future is the increase of GST almost exactly as how it has been done with our petrol prices. May be you will see a GST 95 and GST 97 story ?
Worry no more, the next article will share "what we could do" . . . but before that, we may have to talk about "a perfect world" in order to really understand "what we could do".
This article was suppose to be read in this sequence.
This article was suppose to be read in this sequence.
Wednesday, May 11, 2011
the sides of GST
Now or in the past, it started with "I will tax this and that". So sales tax, service tax, government tax, custom tax etc. were introduced. With GST, it started with "I will tax everything" except those I give exceptions.
So system wise, GST is also better. Or in another word, GST is more systematic.
Most people may have known the devil of GST from many blog posts by now, but seriously if you look at the topic with a clear mind and NOT just from consumer point of view, you may realize those are really just purely speculation. However, it may still happen but when it does, it is because the consumers ourselves are making it happen. By thinking it might happen.
Interestingly however, not many people know the official GST info. What is the government thinking with regard to GST ?
- Tax payers will pay less tax
- Industries will save money
- Government can earn more money ( diversify income actually )
- GST will not impact inflation etc.
Got it ?
People who buy will pay less,
people who sell will pay less and
government will have more money.
Interesting or not ? its MAGIC !!
At the end, it really doesn't matter what the big boys are doing. What really matter is what affects you. So forget about agreeing or disagreeing with GST. IT WILL HAPPEN ! You may as well start thinking how to make use of this GST to turn yourself into a part of the HIGH INCOME GROUP.
For that, you may want to check out .... Exempted stuffs
This article was suppose to be read in this sequence.
This article was suppose to be read in this sequence.
Friday, September 3, 2010
Individual Income Tax Relief 2010
No. | Individual Relief Types | Amount (RM) |
1 | Self and Dependent | 9,000 |
2 | Medical expenses for parents | 5,000 (Limited) |
3 | Basic supporting equipment | 5,000 (Limited) |
4 | Disabled Individual | 6,000 |
5 | Education Fees (Individual) | 5,000 (Limited) |
6 | Medical expenses for serious diseases | 5,000 (Limited) |
7 | Complete medical examination | 5,00 (Limited) |
8 | Purchase of books, journals and magazines | 1,000 (Limited) |
9 | Purchase of personal computer | 3,000 (Limited) |
10 | Net saving in SSPN's scheme | 3,000 (Limited) |
11 | Purchase of sport equipment for sport activities | 300 (Limited) |
12 | Subscription fees for broadband registered in the name of the individual. | 500 (Limited) |
13 | Interest expended to finance purchase of residential property. Relief of up to RM10000 a year for three consecutive years from the first year the interest is paid. (i) the taxpayer is a zzzzn citizen and a resident; | 10,000 (Limited) |
14 | Husband/Wife/Alimony Payments | 3,000 (Limited) |
15 | Disable Wife/Husband | 3,500 |
16 | Ordinary Child relief | 1,000 |
17 | Child age 18 years old and above, not married and receiving full-time tertiary education | 1,000 |
18 | Child age 18 years old and above, not married and pursuing diplomas or above qualification in zzzz @ bachelor degree or above outside zzzz in program and in Higher Education Institute that is accredited by related Government authorities | 4,000 |
19 | Disabled child | 5,000 |
20 | Life insurance dan EPF | 6,000 (Limited) |
21 | Premium on new annuity scheme or additional premium paid on existing annuity scheme commencing payment from 01/01/2010 (amount exceeding RM1000 can be claimed together with life insurance premium) | 1,000 (Limited) |
22 | Insurance premium for education or medical benefit | 3,000 (Limited) |
Saturday, May 15, 2010
Individual Tax exemption in zzzz
Below shows an extraction from zzzz Income Tax department. Some of the highlights are;
- maternity expenses, traditional medicines exemption are UNLIMITED !
- if you were terminated with compensation, some are exempted !
- Scholarship is exempted, so study Hard !
- Income derived and remitted from oversea is exempted, so globalize your business !
Do take time and go through below details, I am sure it will spark some innovative ideas if you are in the midst of optimizing your tax plans.
Leave passage within zzzz not exceeding three times in a year and one leave passage outside zzzz not exceeding RM3000.
With effect from the year of assessment 2008, medical benefits exempted from tax is expanded to include maternity expenses and traditional medicine like ayurvedic and acupuncture without limit.
The full amount of gratuity received by an employee on retirement from employment is exempt if:
i. The Director General of Inland Revenue is satisfied that the retirement is due to ill health;
ii. Retirement on or after reaching the age of 55 years/compulsory age of retirement and the individual has worked 10 years continuously with the same employer or companies within the same group
iii. The retirement takes place on reaching the compulsory age of retirement pursuant to a contract of employment or collective agreement at the age of 50 but before 55 and that employment has lasted for 10 years with the same employer or with companies in the same group.
Gratuity paid out of public funds
Gratuity paid out of public funds on retirement from an employment under any written law.
Gratuity paid to a contract officer
Gratuity paid out of public funds to a contract officer on termination of a contract of employment regardless of whether the contract is renewed or not.
This is payment made by an employer to his employee as compensation for loss of employment either before or after the date of termination.
This compensation is exempted from tax
- If compensation received is due to ill health
- Compensation received in other cases:
- Termination before 1st July 2008 - exemption of RM6000 for every completed year of service with the same employer or with companies in the same group
- Termination on or after 1st July 2008 - exemption of RM10000 for every completed year of service with the same employer or with companies in the same group
Compensation received by a director (not service director) of a Control Company is fully taxable.
Pensions received by an individual are exempt under the following conditions:
He retires at the age of 55 or at the compulsory age of retirement under any written law; or
If the retirement is due to ill health and the pension is received from the government or from an approved pension scheme.
For an employee in the public sector who elects for optional retirement, his pension will be taxed until he attains the age of 55 or the compulsory age of retirement under any written law. Where an individual receives more than one pension, the exemption is restricted to the highest pension received.
Monies received as death gratuity is fully exempted from income tax.
Any monies paid by way of scholarship to an individual whether or not in connection with an employment of that individual is exempted from income tax.
Money received under this category is exempted from tax on condition it is approved by the Minister.
Income in respect of interest received by individuals resident in zzzz from money deposited with the following institutions is tax exempt with effect from 30 August 2008:
A bank or a finance company licensed or deemed to be licensed under the Banking and Financial Institutions Act 1989;
A bank licensed under the Islamic Banking Act 1983;
A development financial institution prescribed under the Development Financial Institutions Act 2002;
The Lembaga Tabung Haji established under the Tabung Haji Act 1995;
The zzzz Building Society Berhad incorporated under the Companies Act 1965;
The Borneo Housing Finance Berhad incorporated under the Companies Act 1965
The following dividends are exempt form tax:
Dividends received from exempt accounts of companies.
Dividends received from co-operative societies.
Dividends received from a unit trust approved by the Minister of Finance such as Amanah Saham Bumiputra.
Dividends received from a unit trust approved by the Minister of Finance where 90% or more of the investment is in government securities.
Royalties received in respect of the use of copyrights/patents are taxable if they exceed the following exemption limits:
No. | Types of Royalty | Exemption (RM) |
| 1 | Publication of artistic works/recording discs/tapes | 10,000 |
| 2 | Translation of books/literary works of Education or Attomey or General Chambers | 12,000 |
| 3 | Publication of literary works/original paintings/musical compositions | 20,000 |
However, the exemption stated above does not apply, if the payment received forms part of his emoluments in the exercise of the individual's official duties.
With effect from the year of assessment 2004, income derived from outside zzzz and received in zzzz by resident individual is exempted from tax.
With effect from the year of assessment 2004, fees or honorarium received by an individual in respect of services provided for purposes of validation, moderation or accreditation of franchised education programmes in higher educational institutions is exempted.
The services provided by an individual concerned have to be verified and acknowledged by the zzzzn Qualifications Agency (MQA). However, the exemption does not apply if the payment received forms part of his emoluments in the exercise of his official duties.
With effect from the year of assessment 2004, income received by an individual from the commercialization of the scientific research finding is given tax exemption of 50% on the statutory income in the basis year for a year of assessment for 5 years from the date the payment is made.
The individual scientist who received the said payment must be a citizen and a resident in zzzz. The commercialized research findings must be verified by the Ministry of Science, Technology and Environment.
Friday, March 6, 2009
Calculate your monthly tax deduction
Just in case some of you zzzzn do not know yet, you can go to this site to calculate how much your monthly tax deduction should be.
In the old time, good employer may help you by assuming maximum deduction so that you pay less monthly tax and then at year end you yourself pay the due amount.
However, in the new system, employers are required to assume basic deduction only while others not. So most of you may ended up paying more tax monthly.
What you need to do is to go to this site and calculate for yourself how much tax you should pay monthly. Print it out and show it to your employer to adjust the figure.
This basically means if you want to pay less tax, you need to plan early and meet the targets of what you plan ie.
RM 5,000 Take responsibility and proactiveness in your parent's health
RM 5,000 Take a MBA course etc. Deduct educational fee from it ( for kids originally )
RM 1,000 Learn more, buy more books
RM 3,000 Buy a new computer every 3 years
RM 300 Sport gears
RM 3,000 Save for kids education in SSPN
RM 3,000 Your own medical insurance
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