Tax season is upon us, and you’re probably wondering if there are ways to do good, and to save on the taxes paid.
Donating now can only count towards next year, if you’ve donated after 31 Dec
Unfortunately, whatever you donate now, can only count towards your tax deduction next year, and not this.
But still, you want to know how it works.
Chargeable Income | Income Tax Rate (%) | Gross Tax Payable ($) |
First $20,000 | 0 | 0 |
Next $10,000 | 2 | 200 |
First $30,000 | 200 | |
Next $10,000 | 3.50 | 350 |
First $40,000 | 550 | |
Next $40,000 | 7 | 2,800 |
First $80,000 | 3,350 | |
Next $40,000 | 11.5 | 4,600 |
Let’s say you earned a salary of $70,000 this year.
| Chargeable income | Income tax rate | Gross tax payable |
|
First $40,000 |
550 | |
|
Next $40,000 |
7 |
2,800 |
| Total tax due before donations | $3,350 | |
|
But if you donate to charity For example, if you donated $500, your chargeable income reduces by $1250. |
You get a 250% tax deductible, reducing your chargeable income. $70,000 - 250% x $500 = $68750 | You thus pay $550 of tax on your first $40,000 and $2012.50 on the next $28,750. |
| Total tax due after donations | $2562.50 |
What do you have to do to get the tax deductible? Nothing, if you donate to a IPC registered charity.
If you’ve filled in the right forms, the IPC-registered charity would have automatically submitted the amount of your donations to IRAS, so that it’s automatically computed.
For example, if you donate with us at The Helping Hand, we will keep a record of your NRIC, so that we can submit the relevant details to IRAS.
This helps you to automatically qualify for the tax donation.
How do you choose the charity to donate to?
Well, this is a far harder question.
- What do you feel most strongly about?
- Have you had personal experiences in your life that have required someone’s kindness?
I often show donors this chart from NVPC, that shows where the monies go. And we can quickly see that the money often goes to the elderly, and youths, but not that much to ex-offenders.
Some think that ex-offenders, especially those that suffer from drug dependencies, are at fault. But sometimes, they grow up in very averse circumstances that make it difficult for them not to turn to drugs to find some way to assuage their pains.
For example, with Kenny, one of our long-time operations staff, his parents divorced when he was young. He ended up being introduced to drugs by his uncle during his young teens. When you’re hooked at such a young age, it can be hard to think of how best to change and move things forward.
But eventually he did.
And here at The Helping Hand, we always believe that people can change. If we are willing to give them a chance to.
Why not consider donating to us?