How To Pay Less Tax LEGALLY

LEVERAGE YOUR INCOME  TAX
Disclaimer : I am NOT a qualified tax advisor, this is solely based on my research and experience! You should not believe what a total stranger tells you, do your own research & listen to the government, :D

Haven't Heard of "Leverage" Yet !??

Leverage is the ability to do MORE with LESS






To fully understand what I am going to share with you,
You need to read or re-read my previous post, so that you will benefit from it

Again, I am here to share my short experience during housemanship, so my focus will always be and always will, in the point of view AS A HOUSEMAN. However, since we all have a medical degree, please use your creativity, this can be universal once you get the whole idea, if you're a medical officer or specialist (hopefully my boss don't read this, lol), think hard, you be amazed on how much money you've DONATED to the government legally and unnecessarily all these years !!!

To understand this concept, although its not a rocket science, it is just that nobody care to share it with you or medical field related profession just don't care (I bet my money on the latter), you need to master 3 things only !!

1 . How to calculate your Taxable Income
2 . The difference between Relief and Rebate
3 . Simple Primary School Mathematics


Houseman's Income Tax, for 2013
You all did not start housemanship on the same day, so your income can be different from this due to several reason (eg : annual income increment, bonuses, back-dated salary payment, bla bla bla). I have calculated based on a houseman payslip.

** This is an actual screenshot, on how i keep my record, its practical & easy

So, the total gross income, for year assessment 2013, is RM 65,063.27 (kaya meh this houseman? )
by applying the "tax bracket", the taxable income should look like below :-

** note that the arrow shows gross total income, before and after, minus the relief by LHDN
** the red box shows the tax you need to PAY, before and after, minus the relief

You save almost 50% legally in tax right ?? So what lesson can be learnt here ??
Sure you won't think, because you know i will tell you, right... haizzz...

Le$$on #1 : the more relief you use, the lesser the tax !!
- This is possible because "relief" is design to REDUCE your total income, so less money will end up in the "higher bracket", thus reducing the tax
- In the above case, note that the bracket 19%, is zero on the right side !!

Le$$on #2 : we can aim our income to stop at 7% bracket
- How is this possible? Yes, more or less, houseman income tax looks like this. But the above example, i only use relief which are :-
1) self relief (-9000)
2) EPF (-6000)               ** this total up RM 16,000, note that on the left, money in
3) Books (-1000)                bracket 19% is only RM 15,067.27 , will be nil after relief !!

- To aim for bracket 7%, how much relief do you need, to wipe off the 12% bracket ??
Yes, depends on the money inside bracket 12% lohh !!  Which is about 14k, right ??
- Any more relief you can use? Sure, several of them !! Check LHDN website.

Le$$on #3 : rich people has tons of relief / loophole
- That is why, the rich stays rich and gets richer !!
- They leverage on tax, they have alot of relief given through their company or corporation (not as individual), while they make more profit, they pay less taxes !!
- Make sense or not ??? Now you wonder why they get richer day by day
- Of course this is only one strategy and considered as "small" for them

It's like, either you pay higher tax to the government (of course they will use it wisely)
or
Use RM 1000 of your money (throughout one whole year) to buy books, get to own the knowledge and income tax relief at the same time !! 

Save your hard-earned money, unless if you love "kangkung" so much !! Mari.. Mari...!!

p/s : some strategy to pay less tax legally, i can't share it here, the government doesn't like it, there is even rules to make sure this "strategy" doesn't circulate to the public. Never mind lah, just pay only, we love our country, it is peaceful, no corruption, we are the best in Asia lorr !!

$s$ 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"

#5 : Killer Department

Killer ??? Shouldn't we all be Healer ???

The ugly truth is that, not everyone is professional, even the specialist !!!

Every hospital has killer department at least one. If theres two killer department and you still choose to go there, i can't find a better word to describe you than "Insanity" !!

What makes a department becomes a killer department :-
1) The Head of Department (HOD aka Big Boss)
- eg: very strict, one wrong dose of paracetamol, straight away get extended. Forgot to wear name tag, you'll get warning letters, ect.

2) The Specialist
- eg : have a special request like, HO must remember all cases while presenting the case to him/her, they will take the patient's file away from you. Cannot set up IV line at patient's leg (even if its damn hard to set in the arm). Many more. Some i find very childish & stupid, like i said, not all are professional

3) The Medical Officer
- eg : all orders given by him/her, must be settle before evening round. Some are beyond HO power, like to call the family member to come to hospital to sign consent. Or to make sure the discharge patient go back before evening round. ** i'm not making all these, it happened to me when i was a HO**

4) Lame sister / nurse / attendant
eg : you want to take blood culture, but the blood bottle is not there. You order nurse to give oxygen, but oxygen tank is empty. Ask the attendant to take the blood investigation result at lab, but they only bring back patient's food (although lab and diet department is on the same the way). At the end of the day, you'll get scolded by your superior for "not" doing your job on time.
** some department has very cekap staff, while others, just makan gaji buta, specialist & MO never blame staff **

#4 : Busy Department

Busy.... Busy.... Busy....

Do you know that in United Kingdom, they have rules & regulations saying that the maximum working hours for doctor is 48 hours per week, that includes junior doctors as well.
Which can be translated to, working more than 48 hours per week, is AGAINST THE LAW !!!

Developed country strongly believe that mistakes will only increase if doctors are overworked, thus they implemented such rules. Malaysia, the next promising developing country yet to be classified as developed country, is somehow....
doing the direct opposite. Didn't the West did what we are doing right now years ago and they failed ??? Why can't we learn from their mistakes, they tried everything before becoming a developed nation, isn't it ??

"Those who cannot remember the past, are condemned to repeat it "

Whatever lah, Malaysia Bull-eh, hehe...
Ok, to be successful in HO life, my advice is to choose your department wisely. Most of the HO who quit, are in the 1st & 2nd posting. Most of them can't even endure the 1st month in HO life, then they went missing.
The solution, don't even think of doing the busy department as your 1st posting if you are not well prepared !! Call your hospital admin before duty-reporting date, ask them to change, give them 999 reasons to help you !! 

It is generally known that, Medical department is the MOST BUSY of all, regardless of states, be it in KL or in Kelantan.
In my hospital, the ranking goes like this (from the most busy, to the less busy)... :-

1. medical
2. surgical / ortho
3. o & g
4. paeds

of course Emergency dept is busy as well, but it'll be your last or 5th posting only.
The word "Busy" here is directly proportional to number of patient, i am not talking about some annoying specialist who ask HO to do hourly vital signs monitoring for all patient making you "busy" as well (nurse will be jobless then). The ranking changes, but medical will always stay as the KING !!!

Tips : Find out the number of wards allocated to each department, you'll get a rough idea on which department has the most patient.
Example :-
If Medical has 8 wards altogether meanwhile o&g has 4 wards + labour room, doesn't that tell you something ???

#3 : Live Far From Hospital

Just Apply For the Hospital Quarters / Hostel

Most of HO tend to stay at their parent's house, as they don't own a house obviously.
If you choose to do HO at hospital near your parent's house, thats fine.
But try to get the hospital quarters / hostel also, if possible. Why?
Its easier to go to work without having to wake up so early in the morning just to beat the traffic, or have to drive for 45mins when the clock shows 11.59pm.
Some of my friends got involve in car accident after falling asleep while driving (too tired after working). Lucky that no one was hurt, but still you lose your hard-earned money to repair the damage !!

If you choose to do houseman far far away from your family, then applying for this hostel is a must for you. Don't fall into the society trap, doctor has to life in a mansion, driving BMW.. Thats all crap !!
Just live a moderate HO life, for 2 years only maaa...

Because this quarters / hostels are limited in numbers, they may reject application coming form HO whos parents live nearby.... Thus, making those doing houseman far from their family a STRONG applicant  !!!

Live as near as you can from the hospital, you will save energy, time, money & might as well save you YOUR LIFE !!!!!!  :D

#2 : Less HO in Department

This can only be applied after you have entered the hospital of your choice. Why?
Because Hospital admin will always put new HO (regardless of 1st posters or not) according to the number of HO in a particular department. They cannot allocate all 10 new HO to medical (already have 20 HO there) when Orthopedic only have 10 HO left, right?
They will try to balance the number of HO in each department so that there are no jobless HO in one department when there are overworked HO in the other department.

The point here is, 1 month before finishing your 1st posting, try to find out whether the next department you're about to enter is depleted of HO (ask those in that department). If its not, then you will not face any problem with lack of HO. If it is yes, what you should do is....

1. Go to your hospital admin (normally it's call bahagian sumber manusia)

2. Ask the officer in-charge to change you to another department, normally they will ask which department you want to enter. (again, do some research on which department has sufficient number of HO, if not, you'll end up in the tiger's mouth trying to avoid a dog-bite)

3. Sometimes admin is reluctant to switch you to another department. Just come up with some good & solid reasons. We're all born as liar at some point, why not use it for good reason, lol

Problems related to lack of HO in a department :-

• +++ workload = one HO covers more patient, need to start your AM round early, go back late, miss your breakfast & lunch & dinner
• +++ stress = many complaints, tons of issues need to be settled
• Freeze Leave request = since less HO available, the department cannot afford their "frontliner" to go on leave (cuti), all your request will be rejected. Remember, your leave is not your right !!
• Shift changed to On-call system = shift system for HO is less tiring compared to on-call system. With less HO available, its going to be hard to create a 3 shifts schedule for HO.  They will end up make HO do on-call system. You're not getting extra salary to do more hours, okay? Only few will thank you for your hardwork
• Working on Big Holiday = muslim working on raya, chinese working on CNY & so on, while bosses cuti kaw-kaw... lol
• Have to work even if you're sick = unless you are being admitted to the ward for falling sick, some will not tolerate, you might get extended in the damn department for falling sick. 

 " Do not expect the world to be nice at you, just because you are nice to the world. Its like asking the lion not to eat you, because you do not eat lion "

#1 : Busy Hospital

Rule of Thumb #1

Busy hospital = busy for everyone, not only HO !!!

How busy do you expect HO life is?? You don't until you become one !!!
Thinking back, HO time is the only moment in my life where i write and walk THE MOST... and... eat, sleep, holiday, rest THE LESS !!!  zzZzzZzz...

Since all government hospitals are expected to be busy all year long, what you can do is, use your head.
Since the population in KL/Selangor is bigger compared to Perlis, it is only logic to say, HKL is more busy than HTF. Do some research, if you want to.

Example :
HKL has neurosurgical department, but Malacca Hospital don't. So Malacca will have to refer to HKL if they have neurosurgical patient. Which will result to more patient in HKL.

Although all government hospitals are expected to have all sort of specialist in various field, still they are lacking of sub-specialist in some department. Say Hepatobiliary Consultant, only a few in the whole south region of Malaysia !!!

Tips : Busy hospitals have advantages as well. Such as KKM will allocate more HO for busier hospital, you can learn a lot from different cases. Sabah/Sawarak hospital let HO do some procedures where in Peninsular, they prohibit HO to do so, like LSCS (Lower segment cesarian section)

THERE ALWAYS SUNSHINE AFTER THE RAIN !!

Life is about choice

"Which hospital is the best for me.."

                "My parents live in KL, whats the best for me...."

    "Do housemanship outside KL first, then come back as MO, hmmm... "

 

Don't make choices you'll REGRET later  !!

To become successful in HO life, you need to make the right choices, not after you become a HO, but even BEFORE you become one !!
Why am i saying this?? Well... Whats the point of dreaming becoming a specialist, when you can't even endure HO life, isn't it?? There are stages of doctor's life you have to go through to get to the top.
Have you ever read in the newspapers, specialist or medical officer died at work?? Or Specialist / MO complain about their workload??
Most of the complain comes from HO, yes you heard me...
Think again, why do these complaints arise in the first place?
Its like, why do people complaint when the government reduces the fuel subsidy (causes fuel price to increase)??? Why the government NEVER complaint, they are using the fuel themselves also, right??

Most complaint comes from HO because they are at the lowest hierarchy in doctor life and they are being  pressured a lot by MO/Specialist. Pressure is subjective, meaning some people can deal with tremendous pressure where others don't. So look in the mirror and evaluate yourself.

Rule of Thumb
1. Busy hospital = Tired
2. Less HO in a given dept = Tired
3. Live far from hospital = Tired
4.  Busy department = Tired
5. Killer department = Tired
6. Old hospital = Tired

I'll explain them one by one in the next post, these rules of thumb, should at least help you in making decision, on which hospital you should choose to serve as houseman.
p/s : during pre-houseman course, you need to tell KKM which 3 hospitals you're willing to work as a HO. So choose lah from now !!

Lets get started shall we??

Lets start from the beginning
Things you should do before reporting to your respective hospital.

1st - sign up for EPF (KWSP), for HO, its compulsory to have one. If later u decide to go for "skim pencen", then after becoming MO only u can change. For now, just get an EPF account. Remember to bring your epf slip (at least remember your epf account number), gonna use it for hospital registration.

2nd - open a bank account. this one, i assume all of us already have at least one right? this is for the govt to bank in ur monthly pay (for our gaji liao). Just print out your bank statement which shows name and bank account number. Can get from online banking or just go to the nearest branch, ask for "surat pengesahan akaun untuk kemasukan gaji", the bank ppl will know laa, they will ask you to fill up a form, and they will check with their data and give official stamp on it. Thats it, simple right?

3rd - you're gonna need all your family member's detail.
eg : full name,
      i/c,
     dob,
     birth certificate number,
     your parents workplace detail
its for the registration as well, they are entitle to special treatment (not that special laa) if they are admitted to hospital and for other things which during kursus induksi, they will tell you all about it.

4th - get your medical doctor stamp ASAP !! Normally it will take 3 working days to get it done. It will save alot of time, u can just "chop & sign" instead of manually writing ur name, pegawai perubatan bla bla bla..
the format : (diff hosp may have diff requirement, but as far as i'm concern, no one really cares)

Dr. Ahmad Aidil, 
Mbbs IMU
Pegawai Perubatan UD41
No. MMC 59761
Hospital Kuala Lumpur (i dont put hosp name, so i can still use it, if i change hosp later)

*no MMC (no pendaftaran sementara) is the one u get from medical council after register with them, u can check online as well

If u had all these things done BEFORE hospital registration, it will save alot of time and effort, some hospital will let you settle these things on your first day, meaning you're not working yet on your 1st day.
Usually, on your 1st week, you will have hospital orientation, from 8am - 5pm. After that, you will start tagging to ur respective department given to you by the hospital admin.

What is "tagging" ??
Tagging is a period of time, ranging from one to two weeks, in which you have to work DAILY from 7am to 10pm. Its considered as the crucial time where you need to learn as much as you can. By saying the word "learn", i mean, learn HOW TO WORK !! no more theory dude. I told you to prepare before becoming a HO right?? Dont worry, i will guide u as much as i can.

Department ??
There are 6 departments altogether
- medical
- surgical
- orthopedic
- paediatric
- obstetric & gynaecology
- emergency dept or anesthesiology (you will be given either one, but u can appeal if u want to change)

to be continue..

Quick Facts 1 : Know your role

Basically, as a HO, you should know whats your job & whats NOT !!
Why?
The govt wont pay u more if u do extra job.
You dont want any unnecessary responsibility or trouble, esp during HO time.
You're not a robot, u'll get tired after sometimes, right?
Let those who earn more than u do, handle the headache.

I'll share my experiences during HO time, things that you'll only learn if u went through it
but now you don't have to, thanks to me.. lol

Why am i doing this??
Well let say, life as a HO is very tough. Some might not make it, i have friends referred to psychiatry due to the overwhelming stress, i myself sometimes have hard time during HO but i am blessed to have good colleagues who are more than willing to guide me through and family members who i cant thank enough for the moral support i've received.
So long story cut short, now its my turn to help others, my way of showing gratitude to almighty god.

Be prepared before becoming a HO !!
Why?
When you already started, believe me, you will NOT have time to prepare for whats coming.
Dont just go rambo into HO life, you're NOT Sylvester Stallone okay !!

Keep on reading, i cant promise that i'll update regularly, but i'll try my best.