Taxes for Next Year

I have done my taxes for YA 2011. Don’t hate me.

Actually, I can’t quite do my taxes until March/April next year. But in the midst of trying to figure out my revised 2012 budget, I had to estimate how much taxes I would have to pay next year. So I went through the whole rigmarole. When next March comes around, I only have to key in the numbers and I am done.

Income

Income from employment (includes bonuses and share options): ~125K
Rental Income (4 months only): ~15K

Deductables

Donations: ~1.9K
CPF Contributions: ~21.5 K
Rental Expenses (includes property taxes, mortgage interests, conservancy, home insurance etc): ~ 7K

Total Taxable Income: ~ 109.6K 

Marginal Tax Rates for YA 2011

 

     

Chargeable Income

Rate

Gross Tax Payable

     
 

$

(%)

$

On the first

20,000

0

0

On the next

10,000

3.5

350

On the first

30,000

 

350

On the next

10,000

5.5

550

On the first

40,000

 

900

On the next

40,000

8.5

3,400

On the first

80,000

 

4,300

On the next

80,000

14

11,200

On the first

160,000

 

15,500

On the next

160,000

17

27,200

On the first

320,000

 

42,700

Above

320,000

20

 

     

I almost forgot about being able to deduct rental expenses initially. Thank goodness an accountant friend reminded me to check.

So that’s about $8,400 in taxes next year or about $760 monthly. If we take that and proportion it to my gross income, I’m paying only about 6%. The new income tax rates starting from YA 2012 are even more attractive. I pay about 20% less for the same income based on the new rates.

When I read about 25-35% tax brackets for North America and taxes in excess of 50% for socialistEurope, I shudder. Sure we pay 5 times the norm for cars, and don’t have free healthcare and education, but given the current situation on healthcare and education costs, and luxury goods inSingapore, I rather have the flexibility of keeping most of my money to distribute as I wish.

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