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There are just 6 more days to go before Tax submission time in Malaysia. Have you done your taxes?

Whether you opt for the online e-filing submission or the traditional hard copy forms, here’s a recap of tax savings for perquisites from the Budget 2009 announcement which might help you legally reduce your taxes!

All these tax exemptions are to be deducted from your EA form total (if shown as gross) before you fill in the “Penggajian” section in C1 of your Borang BE 2008. Read more below.

Petrol Allowances (Personal)

• Petrol allowances, petrol cards and transport allowances from home to work are tax exempt up to RM2,400 per annum from 2008 up to 2010.

Petrol Allowances (Official)

• Petrol allowances, petrol cards and transport allowances for official use are tax exempt up to RM6,000 per annum effective 2008.

Awards From Your Company

• If you have been given an excellence award, long service award or monetary recognition from your company, up to RM2,000 of that award is tax free and does not need to be declared in your tax form.

Parking & Meal Allowance

• Tax exempt with no limits with effect from 2008.

Childcare Allowance Or Subsidies

• Tax exempt to a maximum of RM2,400 per annum with effect from 2008.

Telephone & Bills

• Telephone, PDAs, mobile phones and pagers provided by the company and its corresponding bills are tax exempt with no limits, effective 2008.

Computers & Broadband

• Computers provided by the company and monthly broadband fees (paid by employer) are tax exempt for 2008 to 2010.

Medical Benefits

• Maternity expenses and traditional medical treatments are tax exempt without limit, effective 2008.

Discounted Goods Or Services

• Discounted or free goods or services provided by the employer are tax exempt effective 2008, provided the benefits are non-transferable.

Interest Subsidy

• Interest subsidies provided by the company for loans up to RM300,000 for housing, motor vehicles and education are tax exempt, effective 2008.

It is a whole long list of goodies which you might benefit from in reducing your overall tax payable!

However, if you have submitted your tax forms, don’t fret as most of these benefits are still applicable up to 2010 or beyond. Instead, think of how best you can restructure your compensation package with your company to take full advantage of these tax exempt perquisites.

Look out for more ways to save on your taxes with these Tax Saving Strategies:

• Tips For Saving On Taxes – Part 1
• Tips For Saving On Taxes – Part 2

Don’t forget the April 30 Submission Deadline!

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Tax preparation does not have to be a taxing time! In fact, with 2 months to go before the year end deadline, now is a good time to take advantage of tax saving tips to see if there are any additional tax rebates or deductions you can take advantage of before the 31 December deadline looms. Read on for more tax saving tips!

The earlier tax tips provided features some tax deductions Malaysian tax payers are entitled to. This second installment of tax saving tips will feature additional tax deductions you can utilise.

Save For Your Child’s Education

Savings for your child’s education through the National Savings Scheme (Skim Simpanan Pendidikan Nasional) allows tax deductions of up to RM3,000. Best of all, this deduction can be claimed by both parents who are assessed separately, making it a total deduction of RM6,000 per child for each family!

Get A Medical Checkup

In a bid to ensure Malaysians remain healthy, the tax department offers an RM500 tax deduction for medical checkups. In addition to that, a deduction of RM5,000 is offered for yourself, wife or child for medical expenses relating to a serious medical disease. A separate deduction of RM5,000 deduction is also offered for necessary basic supporting equipment for a disabilities suffered by yourself, wife, child or parents.

Purchase A Computer

Purchasing a computer, printer and bundled software will entitle you to a tax deduction of RM3,000. However, do note that this deduction is allowed only once every 3 years. This deduction was previously offered as a tax rebate but has since been revised from 2007 onwards.

Zakat Payments

Tax rebates are additional deductions offered by the tax department. While tax deductions only reduce your overall taxable income by the percentage of your tax rate, tax rebates are calcuated AFTER the taxable income and hence further reduce your revised taxable income by the entire dollar amount! Muslims are entitled to a full rebate on their total zakat payments for the year.

Single Tier Dividend System

Investment in dividend yielding shares for taxpayers whose tax bracket exceed 26% will have benefits to gain due to the new single tier system which has been introduced in 2008 for dividends. Under this system, companies will be paying a company tax of 26% on dividends issued and shareholders who receive the dividends will be getting the net amount, less the 26% tax. Unlike previous years, tax payers will only report the net amount in their taxable income instead of claiming back the difference from the tax department.

Tax payers with a bracket higher than 26% will stand to benefit from the difference between their personal tax rate and the company rate of 26%. Unfortunately, this will only benefit a small percentage of tax payers as most, especially retirees who depend on the dividend income, will be losing from this single tier system.

Consider Investment in REITs

Dividends issued by REITs (Real Estate Investment Trusts) are taxed at a lower 15% compared to the corporate tax rate of 26%. Hence, tax payers whose personal tax rate is 15% and above will benefit from some tax savings from the difference between their personal rate and the 15% tax paid by the REIT companies.

With these tax saving tips, take some time to consolidate your tax returns and work out some tax estimates for your Year of Assessment 2008. Then determine if is any way you can maximise your deductions or rebates to help you towards reducing your taxable income and personal tax rate.

This way, doing your taxes in April 2009 will be a breeze!

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It’s already October which means the tax year is almost at and end and it wouldn’t be too long before we are filling out the dreaded tax forms again. However, on the bright side, as it is now year end it a great time to start consolidating your tax returns and preparing your tax estimates to see how best you can save on your taxes when you fill out your tax forms next year. Read below for tips for saving on your tax returns.

The best way to reduce your taxable income and subsequently your taxes is to maximise your tax deductions which are a component in the calculation of your taxable income.

Make Full Use Of Perquisites

The 2009 Malaysian budget provided tax exemptions for employees on allowances, perquisites and benefits-in-kind provided by their employers. The tax exempted items include petrol card or petrol allowance for travel between home and work place of up to RM2,400 a year, petrol allowance and toll card for official duties up to RM6,000 a year, allowance or fees for parking, meal allowance, and subsidies for childcare of up to RM2,400 a year. Best of all, these exemptions are allowed with immediate effect so do ensure you take note of this when filling out your YA 2008 tax forms.

Separate Assessments, Please

If you are married, always opt to be separately assessed. The personal relief allowed for individuals are RM8,000 which equals to a total of RM16,000 tax reliefs when you file separate income tax submissions. However, if you choose to assessed together, you only get spouse relief of RM3,000 which equates to a total of RM11,000 and a loss of RM5,000 relief.

Separate assessment is also advised if both partners are working as filing it jointly might push you into a higher tax bracket than you would have been in an individual submission.

Inculcate Reading Habits

Taxpayers are given tax deductions of up to RM1,000 for purchase of books, magazines and other publications. Hence, consider giving books are gifts. They not only make great gifts for the recipient but also help you with your annual tax filing. Just remember to file those book receipts!

Buy Insurance

Life insurance contributes to another hefty part of your income tax deduction with a maximum of RM6,000 shared with your annual EPF contributions. Medical and education insurance contributes an additional RM3,000 deduction to your overall taxable income. With your EPF, a taxpayer can look forward to an additional RM9,000 in deductions. Just ensure that the insurance company you purchase your insurance policies from is a legitimate and reliable insurance company.

Consider Post-Graduate Studies

To encourage life-long learning, the Government has further provided a deduction of up to RM5,000 for any course of study for a Masters or Doctorate’s degree. It may even be done part time and the only caveat is that it has to be in an institution or professional body in Malaysia which is recognised by the Government or approved by the Minister of Finance.

Pay Your Parents Bills

Tax payers can further claim up to RM5,000 for their parents’ medical bills. There are no limitations on this so bills from private hospitals or government hospitals as well as any prescribed medicine from these hospitals are fully claimable up to RM5,000.

These are some of the big-ticket tax deductions Malaysian tax payers can look forward to in their tax assessment forms and should take advantage of. With the 2008 year coming to a close, start to assess your deductions and try to maximise them so you may reduce your taxes when filling out your assessment form next April.

Stay tuned for more tips coming your way!

One main focus of the 2009 Malaysia Budget was on easing the people’s burdens in these times of rising inflation and a much greater focus was given to employee welfare.

If you originally thought that the Budget 2009 didn’t really benefit you directly, read below and you might be surprised to know that you can potentially save up to 4% in taxes through the changes in the Budget!

The 2009 Budget provided tax exemptions on travel allowances and other employee benefits such as interest subsidies, childcare allowances, mobile phones, staff discounts and others with immediate effect.

These used to be lumped together with the employees annual salary and taxed at the end of the year. That way, employees never fully benefitted from these allowances as a travel allowance of RM2,400 per annum will not be fully RM2,400 as there is some tax applied on it.

Based on Ernst & Young’s analysis, employees can stand to gain up to 4% tax savings in the Tax Year of Assessment 2008 through this tax exemption.

KUALA LUMPUR: Employees in general can save about 4% in tax payment on their income pursuant to the tabling of the Budget 2009 last week, said Ernst & Young Tax Consultants Sdn Bhd executive director Tan Lay Keng.

“It has an effect on the overall saving of approximately 4% for the employees in general after taken into consideration all the allowances and incentives proposed for budget 2009″, she said.

Hence, if your boss has rejected your requests for a salary increment, it is a good time to ask him or her to make it up to you in the form of allowances instead!