How I Saved $4,000 in Income Tax

It’s income tax season again, and like every good Singaporean, I’ve been looking at my tax reliefs closely. This year, I managed to shave off around $4,000 in taxes by making smart use of government-approved relief schemes, all while growing my savings.

Here’s a quick breakdown of how I did it.

1. Child Relief – $12,000

All my 3 kids (Yes I have 3 kids....) are under 16 years old, which qualifies me for the Qualifying Child Relief (QCR). For QCR, I’m entitled to $4,000 per child, so that’s $12,000 off my taxable income straight away. 

This is absolutely a bitter sweet tax relief to have for a parent. I understand that the Child Relief is not something anyone can just choose to have. Its ok, there's still option 2 and 3 below.

2. CPF Top-Ups – $11,000

I made two voluntary CPF top-ups last year:

• $3,000 to my CPF Medisave Account (MA)
• $8,000 to my mum’s Retirement Account (RA)

Under the Retirement Sum Topping-Up (RSTU) Scheme, you can claim tax relief for up to $8,000 for topping up your own CPF SA/RA, and another $8,000 for top-ups to your loved ones. I couldn't top up my own SA for tax relief because my SA had exceeded the FRS.

Although my MA had also hit the BHS, the $3000 top up is possible because of the increase in BHS yearly.

So in total, that’s $11,000 earning safe, risk-free returns while reducing my tax bill.

3. SRS Contribution – $15,300

I also contributed $15,300 to my Supplementary Retirement Scheme (SRS) last year. This is a powerful way to cut your taxes and build up a retirement fund especially if you are in the higher tax bracket.

The full amount is tax-deductible — that’s $15,300 shaved off my taxable income. I’ve invested the money I have contributed to my SRS via Endowus. I have put them in Fullerton SGD cash fund via Endowus while waiting for opportunities in the market. With that, it’s earning a return of about 3% per annum.

 

My Total Tax Savings: ~$4,000

Here’s a simple breakdown:

Relief Type	Amount	Tax Saving (11.5% tax bracket)
Child Relief	$12,000	$1,380
CPF Top-Ups	$8,000	$920
SRS Contribution	$15,300	$1,760
Total Savings	$35,300	~$4,000

Note: Actual tax savings depend on your income bracket, but this is roughly what I got.

Bonus: Interest While Saving Taxes

Unlike other types of tax reliefs that don’t grow your money, my CPF and SRS contributions are still working hard in the background:

• $11,000 in CPF (MA + RA) is compounding at 4% yearly.
• $15,300 in SRS, invested through Endowus, is compounding at about 3% per year.

That’s around $700 in passive income annually on top of the tax savings.

Final Thoughts

If you want to optimize your finances in Singapore, I feel that tax planning is a must. Instead of looking at your tax bill and complaining, do something now to reduce your tax bills next year. Use tools like:

• CPF top-ups (especially for family members)
• SRS contributions

Not only will you pay less tax, but you’ll also grow your money safely at the same time.

Let your tax dollar work for you — and not the other way around. 

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