Key Tax-Saving Strategies Based on example of a husband earning $140k and wife earning $60k per annum.
1️⃣ Personal Income Tax Planning
Without Reliefs:
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Husband tax (on $140,000) = $10,950
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Wife’s tax (on $60,000) = $1,950
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Total family tax bill = $12,900
2️⃣ Claiming Child-Related Reliefs
Since you and your wife have 3 children, you can claim:
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Qualifying Child Relief (QCR):
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$4,000 × 3 = $12,000 (either parent can claim)
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Working Mother’s Child Relief (WMCR) for your wife:
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1st child: 15% of her income = $9,000
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2nd child: 20% = $12,000
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3rd child: 25% = $15,000
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Total WMCR = $36,000
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Total Reliefs Claimed (QCR + WMCR) = $48,000
📌 Impact:
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Your wife’s taxable income drops from $60,000 to $12,000 → She pays $0 tax!
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Your taxable income drops from $140,000 to $128,000 → You save $240 in tax.
3️⃣ CPF Top-Ups for More Tax Savings
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If you top up $8,000 to your CPF SA/RA, you get $8,000 tax relief.
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If you top up $8,000 to your wife’s CPF SA/RA, you get another $8,000 relief.
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Total CPF Top-Up Tax Relief = $16,000.
📌 Impact:
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Your taxable income drops from $128,000 to $112,000 → You save $1,840 in tax!
4️⃣ Supplementary Retirement Scheme (SRS) Contributions
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If you contribute $15,300 to SRS, you get $15,300 tax relief.
📌 Impact:
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Your taxable income drops from $112,000 to $96,700 → You save another $1,400+ in tax.
5️⃣ Parent Relief
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If you support your parents (aged >55 & earning <$4,000), you can claim:
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$9,000 per parent (if living with you).
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$5,500 per parent (if not living with you).
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📌 Impact:
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If you claim $9,000 for one parent, your taxable income drops from $96,700 to $87,700 → You save another $880.
💰 Final Tax Savings Summary
| Strategy | Tax Savings ($) |
|---|---|
| Child Relief (WMCR + QCR) | $2,190 |
| CPF Top-Ups (Self & Spouse) | $1,840 |
| SRS Contribution | $1,400 |
| Parent Relief (One Parent) | $880 |
| Total Savings | $6,310 per year |
💡 Your new tax payable: $4,640 (vs. $10,950 before).
💡 Your wife’s new tax payable: $0 (vs. $1,950 before).
🔹 Total Family Tax Savings = $6,310 per year!
🔹 Over 8 years, that’s $50,480 saved! 🎉
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