V. Claim Parent Relief as one of your tax reliefs.²⁴

This section is new to the 2024 edition of this guide.

Tax saved: $825 to $4,200 (15% of $5,500 to $28,000).²⁵

Downside: none, assuming that you would have supported your parent(s) anyway regardless of whether it entitles you to any tax relief.

Unlike the other steps in this guide, this step requires you to actively add a tax relief item when you file your Income Tax Return. It also requires you to coordinate with your sibling(s) (if you have any) on how this tax relief should be shared.

Please don't sleep on this. It was only when preparing this year's guide that I realised that I might have overlooked this for my last tax filing. This was especially galling considering that Ernest See had already highlighted this scheme in a comment, long before the tax filing season.²⁶ If you're concerned about missing out on this, set a calendar reminder for every May, since the personal income tax filing deadline every year is 15 April (for paper filing) or 18 April (for e-filing).

VI. Donate to Institution(s) of A Public Character (IPCs).²⁷

Donating to an IPC allows you to claim 250% tax deductions. For example, if you donate $5,000 to Methodist Welfare Services or Pro Bono SG, you can claim $12,500 in tax relief.

Further, donations to some charities can be matched dollar-to-dollar under the Tote Board's Enhanced Fund Raising Programme.²⁸ So if you make a $5,000 donation (for example), the charity ends up receiving $10,000. Talk about bang for buck.

Note however that it is not possible to donate X and save Y in taxes, where Y is more than or equal to X. Suppose your chargeable income is $1,112,500, which means that you pay the maximum of 24% tax on your chargeable income exceeding $1 million. Consider 2 scenarios:

(a) you donate $5,000. You pay taxes of $24,000 on your chargeable income exceeding $1 million [($112,500 - 12,500) x 24%], so your actual outlay is $29,000 ($5000 plus $24,000);

(b) you do not donate $5,000. You pay taxes of $27,000 on your chargeable income exceeding $1 million ($112,500 x 24%), which is less than the outlay of $29,000 if you had made a donation.

So don't do this if your only goal is to maximise the dollars left in your pocket after you have finished paying your taxes. But consider this if:

(a) you intend to make a charitable donation anyway, but have not yet decided where to channel your donation towards - if so, and you are able to identify an IPC that supports what you consider to be a worthy cause, you might as well enjoy some tax savings; or

(b) you would like a bit more control over the causes which your funds go towards, as opposed to leaving it entirely to the Government to decide where to spend your tax dollars.

Tax deductions under this section are not subject to, and do not add to, the personal income tax relief cap of $80,000.²⁹

Conclusion

Thank you for your contribution to nation building.

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