Since this is the start of a brand new year, I shall attempt a couple of things to save on next year’s assessment. I found a few that I could use, and maybe they are useful for you too. Check them out.
1. Save for your child’s education
You could get yourself a tax exemption amounting to RM3000 just by opening a savings account for the purpose of funding education under the National Education Savings Scheme. Read more about it here. To calculate how much this exemption will save you, simply multiply it with the tax bracket that applies to your income. For example, if you fall under the 24% tax bracket, then your tax savings on this would be RM3000 x 24% = RM720.
2. Play some sports and exercise!
Seriously, playing sports could save you some tax dollars. Did you know that you can get a deduction of RM300 if you purchase sports and exercise equipment? This is not just to keep you healthy, it keeps your bank account healthy too! So what is it that qualifies as sports and exercise equipment? Unfortunately it has not been clearly defined in the Sports Development Act 1997, but things like racquets, balls, exercise bikes and treadmills are some things which are quite safe to earn you some deduction. So hurry, don’t put off your exercises! Tax savings in this case will amount to RM300 x 24% = RM71 (using the same assumption that you fall in the 24% tax bracket).
3. Upgrade your PC
Buying a computer will qualify you for an exemption up to RM3000. Previously the exemption was only up to RM500 which, honestly, is too little. The new amount now seems like more it. Take note though that you can only use this exemption once in three years. So time your purchase wisely if you can. Your nett savings on this would be RM3000 x 24% = RM720.
4. Upgrade yourself
Go back to school, pick up a new cert! Though the exemption of RM5000 for postgraduate studies is not new, there has been a change recently. Previously, you will only earn the exemption if you take courses approved by the government. Now, it has been widened to include all postgraduate studies. So earning yourself that MBA or PhD is not just going to make you look better, it will save you money. This time, this exemption will translate to a savings of RM5000 x 24% = RM1200.
There are a more exemptions but I think most people already know of them, like buying books and magazines, take up a life insurance plan, medical and education plans, pay for your parents’ medical bills, donate to charity, etc.
So there you have it, start doing some of them now and see the results in your next tax assessment! I am getting started on some right away.
