You have less than 2 weeks to save on income tax next year. Don’t miss the boat.

Here’s a quick and dirty checklist. Why am I doing this? Because I spent too much time figuring this out and it’ll be a waste not to share this with my friends. All figures are on the assumption that you earn $120,000 per year.

I. Open an SRS account and transfer $15,300 in.

• Tax saved: $1,759.50 (11.5% of $15,300)
• Downside: money is stuck in SRS account. But don’t just let it sit there. Invest it in something long-term. Why? Because you can start to withdraw it from the age of 62 (the present retirement age). You pay taxes on 50% of the amount you withdraw, but if you are retired with no income, you pay even less or no taxes on the withdrawn amount.

II. Transfer $7,000 to your CPF Special Account (SA).

• Tax saved: $805 (11.5% of $7,000)
• Downside: money is stuck in SA. But you get interest of 4%. And when you hit 55, if your Ordinary Account (OA) + SA exceeds $176,000 (the “Full Retirement Sum”), you can withdraw the difference. Yes, $176,000 is a lot of money. Yes, it’s a moving target and if you’re around my age, the Full Retirement Sum is probably going to be something like $400,000 by the time we hit 55. But if you have $65,000 in your SA and you contribute at least $8,400 per year (CPF’s automatic allocation of 7% of your $120k salary anyway), you’ll hit $400,000 in 20 years.
• Complicated? I know! PM me if you’d like more info. Remember, this is just a quick and dirty checklist!

III. Transfer $7,000 to your parent’s/spouse’s SA/Retirement Account. Same scheme as II above.

• Tax saved: $805 (11.5% of $7,000)
• Downside: see II above.
• Wait a minute. Can me and my spouse both transfer $7,000 to each other? Maybe! I don’t know! I’ll call CPF tomorrow to find out. Edit: you only get tax relief if your spouse is earning $4,000 or less for the year. So, no, you can’t cross-transfer. But if you’re the sole breadwinner, consider this!

IV. Voluntary CPF top-up

• Hoo boy. This is tricky.
• If you’re an employee, you’re already putting in the maximum of $37,740 into your CPF every year. So don’t bother reading further.
• If you’re self-employed (you lot know who you are), you have compulsory Medisave contributions of $5,760. So you can theoretically top up another $31,980. But don’t get too excited yet. You would not save $3,677.70 in taxes, because with the deductions of $15,300 + $7,000 + $7,000 = $29,300 above, if you top up so much, you’re going to get bumped down into the next tax bracket of 7%.
• Plus I don’t know how anyone who earns $120,000 can afford to put away $60,000 that can’t be touched until the age of 55, minimum (and you know they’re gonna raise that age every few years right)? We all got bills to pay ya’know.
• So let’s just ignore this. But again, PM me if you’d like to find out more. There are definitely situations in which this is worth considering.

V. Thank you for your contribution to nation building.

Edit: P.S. this is not legal advice, for general information only, etc etc, you know the drill.