Patrick’s Bytes

Briefly these are ideas how you can enjoy some tax savings. To know more on any particular point,  you can pick up a copy of  Personal Money and read thru.

1. Save for your child’s education under the National Education Savings Scheme
2. File separate tax returns- for husband and wife
3. Ask your employer to increase your EPF contributions -Since contributions to EPF are tax exempt for employees, ask your employer to reduce your monthly salary but increase your EPF contribution by the same amount.
4. Change your cash remuneration to cash reimbursement-fixed allowances are taxable but change this to a reimbursement basis and your are not taxed on the amount received. Keep all receipts though.
5. Ask for a company car
6. Make charitable contributions- cannot exceed 7% of your aggregate income.
7. Take up  postgraduate studies-up to RM5K p.a. for any course fo study at the master’s or doctorate level.
8. Read,read,read- up to RM1Kp.a. for purchase of books, mags and publications. Keep receipts.
9. Get sporty-RM300p.a. for purchase of sports and exrcise equipment under the Sports Development Act 1997.  Safe clear cut items include balls, racquets, exercise bikes and treadmills. Clothes and shoes are debatable at the moment.
10. Buy life insurance- RM6k p.a. shared with your EPF contributions.
11. Take up a medical or education policy - RM3K p.a. combined limit for both
12. Pay your parents’ medical bills- up to RM5Kp.a.
13. Claim a deduction of up to RM500 per tax year for a full medical examination and RM5K for medical expenses for serious diseases
14. Pay zakat
15. Buy a computer - RM3k can be claimed once every 3years for purchase of computers, printers and bundled software.
16. Hire a tax consultant-justifiable for those who earn more than RM5k per month to hire a tax adviser to maximise your tax savings.
17. Buy property valued at RM250K or below.Last year’s budget allowed a 50% stamp duty exemption for the purchase of houses not exceeding RM250K. The minimum tax savings that can be found here is RM2k and this exemption is given for one house per individual ad applies to sale and purchase agreements signed between Sept 2007 and December 2010.
18. Buy similar property- if you own 2 properties of same category eg residential, you can reduce the taxable profit made form one property with the loss if nay incurred from the other.
19. Buy shares (high dividend yielding stocks)- if your tax bracket is above 26%.
20. Invest in reits(11 REITs listed on the Main Board) - if your tax bracket is above 15%.
21. Maintain books and records from Day One- separate bank accounts for personal and business transactions
22. Time the purchase and use of your fixed assets
23. Buy a company car- for sole trader or a partner in a business
24. Hire your spouse or family member
25. Implement a process to chase after unpaid debts(for small biz owners).
26. Dedicate a space in your home office- and you can apportion certain costs such as electricity, telephone bills etc as expenses which can be deducted from your business income.

Extracted from Personal Money March 2008 issue.