Income Tax Planning: SRS vs CPF Cash Top-ups

[Panerex77]

Anyone know what's the max CPF relief that a Singaporean can get for YA 2012?

The information on IRAS website is kinda confusing.

 

So to estimate my YA 2012's CPF relief, i am just using my YA 2011 Notice as a gauge.

(i guess my actual CPF relief for YA 2012 shd be higher since my earning is higher yr-on-yr).

 

Also, if our ICT liability is over, that means we are no longer considered as "NSMan" right?

 

 

Now, trying to bring down my personal income tax bracket, i am pondering if i shd be:

1) SRS: at least i can still withdraw before retirement but subj to 5% penalty and be brought to tax, and can use for investment. Helps if i really need cash all a sudden.

 

2) CPF top-up (but cant remember gng to which accounts): generally earn higher interest rates, but bane is locked down till retirement. No way out.

 

Any experts out there to advise, or pple who has gone through the same route and have experience to share?

Edited December 10, 2011 by Panerex77

[2009k]

Give to charity? It invites double deduction on income taxable...

[Panerex77]

Give to charity? It invites double deduction on income taxable...

 

 

not so noble lah...

 

small amt yes...

 

but in terms of hundreds and thousands...not there yet...

 

have not reached the self-actualization stage of Maslow's Needs

[Albeniz]

Year ending extremely soon.

 

What is your tax reduction strategy?

 

Looking at SRS now.

[Spring]

Year ending extremely soon.

 

What is your tax reduction strategy?

 

Looking at SRS now.

I also contributed $7k, $3.5k each to both my parents so that they get a monthly allowance of $297 each. Can get a tax deduction of double this if your parents staying with u and slightly less if they not staying with you.

[Pinobii]

Year ending extremely soon.

 

What is your tax reduction strategy?

 

Looking at SRS now.

sRS have to contribute by year end right

[Albeniz]

Yes.

sRS have to contribute by year end right

Info on SRS.

 

http://www.posb.com.sg/personal/investments/srs-and-cpf/supplementary-retirement-scheme

[Pinobii]

Yes.

Info on SRS.

 

http://www.posb.com.sg/personal/investments/srs-and-cpf/supplementary-retirement-scheme

Thanks, is there a difference in term of choosing the bank for sRS account?

[Albeniz]

I also contributed $7k, $3.5k each to both my parents so that they get a monthly allowance of $297 each. Can get a tax deduction of double this if your parents staying with u and slightly less if they not staying with you.

 

My mother is older than 65 and has almost no cpf in her account, not to mention the minimum sum of $160k as stipulated by the board.

 

If I put in $3.5k for her now, does it mean she gets to draw a monthly allowance of $297 over a period of 1 year?

 

Sorry for the questions as I am rather confused by how cpf operates.

Thanks, is there a difference in term of choosing the bank for sRS account?

 

I am not quite an expert in this area.

 

But I think SRS could be used for trading/investment  and each bank charges differently.

[Enye]

sRS have to contribute by year end right

chief bonus must be very good

 

can contribute 15.3k in 1 lump sum for the year

 

 

[Pinobii]

chief bonus must be very good

 

can contribute 15.3k in 1 lump sum for the year

 

 

[Spring]

My mother is older than 65 and has almost no cpf in her account, not to mention the minimum sum of $160k as stipulated by the board.

 

If I put in $3.5k for her now, does it mean she gets to draw a monthly allowance of $297 over a period of 1 year?

 

Sorry for the questions as I am rather confused by how cpf operates.

 

 

I am not quite an expert in this area.

Yes she gets to withdraw $297 for 11months n the last month she gets to withdraw the remainder ie $233 plus interest earned in the account. If u contribute this coming week, likely first payout will be from Feb 2017 as too late for Jan. My thinking is I need to give my parents allowance anyway so might as well do it with some tax incentive though painful to give $7k at one go.

[Albeniz]

Yes she gets to withdraw $297 for 11months n the last month she gets to withdraw the remainder ie $233 plus interest earned in the account. If u contribute this coming week, likely first payout will be from Feb 2017 as too late for Jan. My thinking is I need to give my parents allowance anyway so might as well do it with some tax incentive though painful to give $7k at one go.

 

Thanks for the info, I am assuming cpf would deposit the monthly sum of $297 into a designated bank account (e.g POSB) for her to withdraw through an ATM machine. 

[Spring]

Thanks for the info, I am assuming cpf would deposit the monthly sum of $297 into a designated bank account (e.g POSB) for her to withdraw through an ATM machine.

Yes designated bank account is for your mum to arrange with CPF directly (not your business) which I believe she shld already have cos some payouts from other schemes require a designated bank account in place.

[Zyrofillica]

Yes designated bank account is for your mum to arrange with CPF directly (not your business) which I believe she shld already have cos some payouts from other schemes require a designated bank account in place.

 

 

Just some quick note that you cannot claim tax relief if the recipient's CPF SA is above capped.

 

Copied from cpf website.

 

1. The full retirement sum (FRS) for an individual who is below age 55 and has CPF Special Account (SA) is capped at $161,000.

2. From 1 Jan 2016, an individual who is at least 55 years old  can top-up his Retirement Account (RA) to a maximum sum of $241,500 (i.e. enhanced retirement sum, ERS).

3. There is no tax relief for cash top-up if the FRS of the individual/recipient's RA is already $161,000.

[Jman888]

My mother is older than 65 and has almost no cpf in her account, not to mention the minimum sum of $160k as stipulated by the board.

 

If I put in $3.5k for her now, does it mean she gets to draw a monthly allowance of $297 over a period of 1 year?

 

Sorry for the questions as I am rather confused by how cpf operates.

 

I am not quite an expert in this area.

 

But I think SRS could be used for trading/investment  and each bank charges differently.

 

 

why can't you give her $300 every month but instead put in $3.5K now?

[Albeniz]

why can't you give her $300 every month but instead put in $3.5K now?

 

The 3.5k is additional, and on top of the $300 monthly which I am giving her now.

[Kusje]

why can't you give her $300 every month but instead put in $3.5K now?

 

Isn't the whole premise of this thread to pay less tax?

 

Why give his mother 300 per month when putting in 3.5k now will also give his mother 300 per month and also help him save on income tax (above 10%?). That's another 300 plus of free money.