By submitting an itemized return, you can cut your taxable income and pay less tax, thus maintain more cash in your pocket.
Here are a few simple tips to get organized and file ready before the deadline:
No matter how technologically superior we become, there is always one tax constant — hard copies. Keeping hard copies is especially essential for the self-employed, who normally take a lot of deductions. When you work for yourself, you must have the paperwork to back your deductions up, as you are more likely to be audited than most. Your organization system can begin with a simple accordion-style file folder with categories for income, expenses and deductions. Color code each category, and then create folders on your computer as well.
Scan receipts and documents
Scanning receipts and important documents is one of the most convenient ways to simplify your tax organization scheme. If you have a smartphone, snap pictures of your receipts, scan them into your computer, and attach the pages to the tax return for the previous year. Continue creating digital versions post-tax time every year, as financial experts say receipt management is still the best way to access your spending habits. While you are organizing receipts, you might want to utilize an online financial application to make tracking expenses easier.
Manage electronic and paper documents
Annually, new gadgets and programs come along to help take the pain out of document management. Your smartphone can also help you manage your paper document through mobile applications.
Safeguard your most important documents
Certain documents should be kept for an indefinite period, such as closing documents on a home, investment transactions, retirement documents and records related to insurance claims. Consider a secure deposit box at the bank or a home safe for these documents. You can also keep a file related to them in your computer for easy reference. If you decide to use your computer for sensitive data, invest in an off-site file backup service in case of computer crash. They are economical and extremely trustworthy.
Keep up with changes
Find out about tax law changes, helpful tips and IRAS announcements all year by subscribing to iras.gov.sg (IRAS website). The IRAS provides regular updates on all changes and activities done by the Singapore government.