5 Basic Things about Income Tax that Tax Payer Should Know
Generally, income taxable under the Income Tax Act 1967 (ITA 1967) is income derived from Malaysia such as business or employment income. Therefore, income received from employment exercised in Singapore is not liable to tax in Malaysia. This is because that income is not derived from the exercising of employment in Malaysia.
For an individual residing in Malaysia for a period exceeding 183 days, the individual is deemed to be a resident for tax purposes in Malaysia under the ITA 1967. However, if the said individual does not receive any income deriving from Malaysia and only receives employment income derived from Singapore, then the individual is still not liable for tax in Malaysia. The resident status of an individual in Malaysia will not automatically result in the income received by the individual to be subjected to Malaysian tax laws.
In Malaysia, it is important to note that taxpayers can now submit their income tax returns through e-filing and this can be done from the 1st of March every year. The system of e-filing is simple and user friendly and that is why it is fast becoming the most popular for taxpayers in the country.
One good thing about the e-filing system as adopted by many Malaysians is that it can automatically calculate your tax instead of having you print out income tax forms and calculating it manually like the traditional tax filing system. Therefore, questions that border on how to calculate your tax returns would become easier to answer. Besides, the e-filing system will give you more time to file your taxes when compared to the traditional filing system with deadline normally on the 30th of April.
Basic Income Tax: Filing Basics
You need to understand the basics of income tax so that you can file your tax successfully and correctly follow the procedure. If you got advise from financial income tax advisor, you still need to fully understand basic filing of tax return which is important. Every tax form have its own function and you need to understand what to report in every form type. Do not forget to include your mailing address, correct name and your identification number. However, things may be slightly different for the e-filing system as you may need to add an account number for direct deposit as well as payment.
Basic Income Tax: Types of Forms
Taxpayer who begins to learn about income tax need take note the important of type of form that need to filled depends on a lot of factors. For example, it could depend on your filing status, taxable income, dependents etc. For business, the type of form will likely depend on the structure of the business that applies. Therefore before filing an income tax, it is important to understand the category you belong and file it accordingly.
Basic Income Tax: Reporting Income
Not all income is taxable and this is where the difference lies. There are non-taxable incomes and knowing this is very crucial in filing taxes. There is a possibility of making costly mistakes if you do not know clearly what your taxable and non-taxable incomes are.
Basic Income Tax: Reporting Income
Not all income is taxable and this is where the difference lies. There are non-taxable incomes and knowing this is very crucial in filing taxes. There is a possibility of making costly mistakes if you do not know clearly what your taxable and non-taxable incomes are.
Basic Income Tax: Tax Compliance
There is no doubt that avoiding paying tax is illegal in Malaysia and many other countries; therefore, it is important you comply. Besides, always ensure that your income tax is filed on time. Tax issues can change from time to time and it is good to take advantage of it. As a taxpayer, it is important to monitor the latest changes on tax issues and see how you can lower your tax if possible.
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