Income Tax Checklist for 2008

How much did you pay for tax last year? If you are ’salaried’ like me, I bet you paid a lot more than you wish, right? So this year, let’s try to minimize our tax expenses, shall we?

Here are the things you can do:

1. Get at least 5 empty envelopes ready.  Mark the envelopes as: 1. Books & Education, 2. Charity, 3. Insurance, 4. Medical, 5. Direct Deductibles (Zakat, Computer)

2. Books are tax-exempted for up to RM 1000 compared to RM 700 in previous years. Yearly fees for continuing education are exempted for up to Rm 5000. So go and buy some books or sign up for courses and remember to file the receipts. Not all courses is applicable, so check.

3. If you’re a philanthropist, and love giving back to society, don’t forget to file your receipts from your donations.

4. Get full medical checkup for yourself, DH/DW and children which is exempted for up to RM 500. All the money in the world can’t help you if you don’t take care of yourself.

5. If you have insurance, you’ll get insurance statement some time at the end of year or early in the year, which is exempted for up to RM6000 (for EPF + Life) and RM3000 (for education + medical).

6. Direct deductibles are Zakat/Fitrah & Computer. Zakat is a must for Muslims. Also, you are entitled for up to RM 3000 for computer purchases (once in 3 years), compared to RM 500 in previous years. I plan to get a computer this year because the rebate is much higher now compared to previous years.

I would usually print out last year’s tax form at the beginning of the year and fill it up in order to estimate how much tax I would have to pay roughly. I would use that amount to gauge how much I would need to spend in order to cover my tax expenses. Don’t go and needlessly buy RM 1000 worth of books if you only needed to pay RM 50 in tax initially.

You can find out more about your tax deductibles here:  http://www.hasil.org.my/melayu/bm_NO2_1_1E.asp

Please note that Lembaga Hasil Dalam Negeri website has moved to http://www.hasil.org.my

9/1/2008 Corrections:

I had just received Borang BE 2007 in the mail today and allow me to make some corrections:

Corrections:

1. Computer purchases are no longer direct deductables or “Rebate”. They are now under “Pelepasan“, for up to RM 3000 every 3 years.

Additional Info:

1. Savings to ‘Skim Simpanan Pendidikan Nasional’ is tax exempted for up to RM 3000 a year. This is under ‘Pelepasan‘.

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