Reducing income tax to $0 for YA2025 ✨
It’s almost the end of September, which means we are left with 2 months to legally reduce our taxable income for YA2025.
💾 Save this post to help bring down your tax bracket this year!
Felly only worked till May this year so her gross income was about $29.5k. She missed her company’s performance bonus payout and if she does nothing at all to reduce her taxes, it will still fall within the first tax bracket (first $30k). But she will continue to action on what she had been doing since she started working and bring it down to $20k for the year.
👆🏼Mandatory 20% CPF contribution as an Employee.
- this is a given and relief is granted automatically
👆🏼SRS contributions
- only $200 a year as she doesn’t use SRS as the main investment product
👆🏼 NS Man relief
- as a spouse to an NS Man, $750 - banked.
👆🏼Earned Income Relief + Personal Tax Rebate
- $1200 for 2025 as the PTR is dependent on the government year on year.
👆🏼Charity Donations
- varies yearly but most of the time she doesn’t quite keep track 😅
👆🏼Voluntary CPF contribution
- After deducting the above, she will do a cash top-up to her CPF Special Account to bring the taxable income to the next lowest bracket. This year, it will be $1.5k!
With the taxable income of $20k, she is now at the lowest tax bracket, paying $0 next year! 😌✌🏼
Of course, there are other ways to legally reduce your income tax:
💰Parent/Spouse Relief
💰Child Relief
💰Course Fee Relief
Felly doesn’t qualify for these this year since her parents are still working and she didn’t attend any course for upgrading (though she did apply for this relief in the last two years)
🏃♂️💨start working out those numbers now before the end of the year!!
If you're aiming to maximize your tax savings for YA2025, starting early is crucial. Apart from the obvious CPF mandatory contributions and NS man relief, I found that regularly topping up my CPF Special Account to bring down my taxable income really helped reduce my tax bracket. Even small SRS contributions add up when combined with other reliefs. Another tip is to keep better track of your charity donations throughout the year. It’s easy to overlook this, but charitable contributions can significantly lower your taxable income and are eligible for tax deductions. Don’t forget about other possible reliefs like Parent, Spouse, or Course Fee Reliefs—they might not apply to everyone every year, but they are worth checking if you qualify. Upgrading skills through courses not only benefits your career but can also give you tax relief. Understanding the difference between deductions and reductions can also help. Deductions lower your taxable income directly, while rebates reduce the tax payable. Planning contributions like CPF top-ups strategically can benefit on both fronts. Lastly, using a personal income tax checklist tailored for YA2025 with all possible reliefs considered can prevent you from missing out on savings opportunities. The key is to take action before the year ends and document everything properly for a smoother tax filing experience.
