After Valentine’s Day and Chinese New Year festivities are over, the next date you should have marked down, is tax season. April marks the dreaded tax filing period where you have to organise your financials. It’s no surprise that most of us can’t stand filing taxes because they can be a painful chore. To ease your anxiety, here are some things you should have down pat with the tax filing process.
Income Tax Terms
- Notice of Assessment (NOA): Notice of Assessment or NOA is your tax bill, which outlines your total income, the taxable amount of income, any deductions in the taxes and total amount that you need to pay.
- Year of Assessment (YA): The year of calculation of your income tax and YA starts on January 1 and ends on December 31. Your next NOA will have 2015 as the year of assessment.
- Basis Period: Basis period describes the period of income for which you are going to pay the taxes for. For instance, the basis period for YA 2015 starts on 1 January 2014 and ends on 31 December 2014.
- Assessable Income: You get assessable income by deducting your approved donations and allowable expenses from your total income. If you have other income in addition to your regular job, these will be counted as your assessable income. Rental income and trading income are counted too.
- Personal Reliefs: Personal reliefs are tax rebates that are deducted from your assessable income to find out the net taxable income you have. You can receive personal reliefs if you are supporting parents above 55 years of age or handicapped parents, supporting handicapped siblings or siblings-in-law and under other similar circumstances.
- Chargeable Income: This is the final amount that you will pay taxes accordingly. Net chargeable income is derived by deducting your personal relief from assessable income.
- Auto-Inclusion Scheme (AIS): Under this scheme, employers file the employment income information of their employees to the IRAS (Inland Revenue Authority of Singapore). You can check your employer’s participation in AIS on IRAS website. However, if you have received a notice or SMS from IRAS for filing tax returns, make sure to comply.
- No-Filing Service (NFS): If you have received an SMS or notice citing your eligibility for No-Filing Service, then you do not need to file income tax returns. However, if there are some alterations in your income or personal reliefs, you must inform IRAS and submit tax returns.