$s$ Income Tax $s$

How Much Are You Paying The Govt Back
** CAUTION **
I am NOT a qualified Tax Advisor, your FINANCIAL INTELLIGENCE is advised !!
Consult your Tax Advisor, They need to make a living as well, LOL

" Two Things Are CERTAIN In Life, Death and TAXES "
    - Benjamin Franklin (1706-1790)




Why Houseman Need To Know?

1. Obviously because you are required to pay income tax by law, ignorance is not a valid excuse
2. You don't want to pay EXTRA on income tax, unless you love to do so
3. In fact, the Govt already take your hard earned money, to pay income tax, before you even get your hands on those money. (refer to HO payslip screenshot, in my Previous Post, if you fail to notice that)

Take Control of Your Hard-Earned Money

I just can't understand why some doctors and nurses, don't bother to LEARN about Income Tax, let alone to learn about money. I have spoken to a nurse, who still has very little idea when it comes to income tax, although she has been working for the past 25 years, on top of that, her husband retired 5 years ago without any "pencen" and has 2 teenagers studying in local university. I pity her, for her financial constrain, but she CHOOSE to be like that, there's very little room for me to help her.

Self Assessment

This is the system we're using right now, meaning, we (taxpayers) are required to assess ourself (financially), fill + declare our own income per calendar year, calculate the taxable income ourself, make payment (or claim our money back) on time and the best part is, make it right for the first time !!

Who Need To Declare Income Tax ?

Answer :  Anyone who earns RM 26, 501 per calendar year, after EPF/KWSP deduction. Around RM 2300 per month of salary. Yes, we are required by law to declare our income. Other source, give a different amount, but the point is, Houseman NEED to !!

Source : LHDN , Says.com

How | Macam Mana

There are 2 ways to declare your income. Offline (using forms) and Online (e-filing LHDN).

My advice, declare using e-filing. Technology is there to make our life easier. Due to the nature of our work, using computer is better, instead of filling up forms and then submit via post or by hand to LHDN.

For first timer, you need to register at LHDN (just need your I/C), after registration, you can fill the e-form later using e-filing at the comfort of your king-size bed !! 

When | Bila

e-filing can only be access 1st March onwards.

Due for submission is April 30th for each calender year.

So this march, 1.3.2014 you will need to declare your income for year 2013 (year assessment).

What If I Don't

Theres Audit from LHDN, they will detect, sooner or later, they will find those who don't declare or under-declare.. but... if you over-declare, they keep their mouth shut !!

Remember, audit is done regularly and extensively, as i mentioned earlier, ignorance is not an excuse. Be prepare for penalty up to RM 20,000 , 3 years of jail or both, if found guilty, and not to forget, you still have to pay the amount of tax you did not declare previously, with interest of course !!

What Happens After I Declare ?

1. Notice (eg: Penalty if late, Request for more information/receipt)
2. Repayment (you receive back the money they auto-deduct)
3. Nothing (govt will spend your money WISELY)

How Much Do Houseman Pay ?

To calculate how much you need to pay (taxable or chargeable income), you need to know the formula. As shown below :-

Taxable Income = Total Income - Tax Relief

After you get your taxable income, there's a way of calculating it, using "income bracket"

Refer HERE, on how to calculate, because someone else has done a good job on explaining this, and i'm lazy btw, lol. Do check with LHDN website, as these bracket can change anytime the govt want.

Know The Difference Between "Relief" and "Rebate"

Relief is use to reduce your income, so that you'll end up in a LOWER bracket, thus lower percentage of tax. Meanwhile, rebate is the amount of tax money that you can CLAIM BACK (since they auto-deduct it).

Refer HERE / DI SINI as he did a great job there, hehe.

Example :-

At the end of year assessment 2013, our beloved govt has auto-deduct my income, total of RM 500. After i calculated my taxable income, the total income tax (after i deduct all the relief) i should be paying is RM 3400. My maths is telling me that, i need to pay the govt another RM 2900 ( 3400 - 500 ) right?

But wait a minute, i paid RM 5000 of Zakat in total that year. 

As any zakat is considered as REBATE, regardless of the amount, so now, i DON'T have to pay the RM 3400 (total of tax according to my bracket), which means, i DON'T have to pay the "remaining" RM 2900 and the govt has to REPAY me back the RM 500 they auto-deduct initially.

Note that i get RM 500 of "rebate from the govt" only, NOT the total amount of my paid zakat !!

There are many TAX RELIEF available

Always visit LHDN website as these relief can change from time to time !!

Save money LEGALLY

Stop giving "tips" to the govt

Pay Your Tax Accordingly

As our Country's debt increases,

what I can guarantee you is, Govt will increase TAX, its already happening, starting with GST, subsidy withdrawn (eg : oil prices), increase toll and so on.

Its the matter of TIME only

Learning How To Manage Your Money Is More Vital Than Ever Before And Managing Income Tax Is A Good Place To Start With

70% of Malaysian end up financially BROKE, 10 years after retirement

- If you retire at 65, your EPF is likely to finished in 10 years time. With increasing inflation, increasing tax and health problems, you will most likely to OUTLIVE your "saving".

That Includes Doctor as well !!

"No one can go back and start a new beginning, but ANYONE can start now and have a new ENDING"