What are the best ways to save time and money this tax year. The original version of this article was published on Tony Robbins.com.

The new year has come and gone and we are close towards the end of the year. Christmas decorations are up in the malls (if you’re braving any public places) and coming new year wishes will signal the start of the next major calendar year. With your earnings year coming to an end, there are many tax tips for 2020 in the final stretch that can help you save both money and time. From claiming relief to maximizing your tax deductions, here are our top tax tips for next year’s filling deadline of April 30 (resident individuals) and June 30 (who carry on business).

Tax Tip #1: Get Organized

The changes to tax laws have changed the deductibility of certain expenses – such as PENJANA-specific relief etc. – so you want to make sure you allow yourself enough time to familiarize yourself with the new rules especially if you are filing your own returns like most of us are.

If you are working with a tax preparer, you’ll want to make sure you gather all of the appropriate receipts and other important tax documents as soon as possible to give them the adequate time to work on your return.

Tax Tip #2: Don’t Miss Out on Tax Relief

Many people take all the standard deduction – a flat amount that everyone is allowed to deduct with no questions asked – because it’s easier. The standard deduction for taxes filed in 2020 is RM9,000 for individuals and RM13,000 for married couples filing jointly. Some of the most common tax relief are for life insurance, lifestyle and charitable donations.

For your life insurance tax relief, it can be claimed under life insurance, education or medical insurance which you will want to max out by correctly categorizing (or using our life insurance tax relief calculator). You can also claim RM1,500 for one mother and RM1,500 for one father if you are not claiming medical treatment for parents. There are also extended tax relief such as medical expenses for self which not only includes serious diseases but now includes fertility treatment. For lifestyle, there is a new additional special tax relief for smartphone, tablet or laptop purchase from June 1 – December 31, 2020 of RM2,500.

Tax Tip #3: Claim All Your Tax Rebates

What’s really the best 2020 tax tip? Don’t leave money on the table!

If you are renting out property, take advantage of declaring all the allowable expenses including interest expenses, repairs/maintenance and Indah Water bills. This is also the last year for a 50% rental income tax exemption for residential properties with monthly rental RM2k below and stamped tenancy agreement.

If you disposed of up to 3 residential properties from June 1, 2020, there is also a RPGT exemption.

Tax Tip #4: Avoid Penalties and Interest

If you file your taxes online, you have an additional 15 days extension automatically. If you won’t be able to file your taxes by the deadline, you may be able to request an extension by talking to LHDN with the justification.

If you can’t pay the full tax bill, pay as much as you and then apply with LHDN for a payment agreement for the outstanding balance. This can be done online via credit card on LHDN’s site (with interest charged) or by directly working with LHDN on your repayment plan.

Tax Tip #5: Maximize Your Tax-Deductible Contributions

Max out your contributions to EPF or other approved funds of RM4,000, Private Retirement Schemes (PRS) or deferred annuity of RM3,000 and SOCSO of RM250. If you are contributing less than the maximum amount, for example you are self employed, you can make voluntary contributions to EPF. If you want to go further, many are unware that if you are self-employed you can contribute to EPF i-Saraan which gives you a 15% government matching contribution of up to RM250 (or RM1,667 EPF investment).

Tax Tip #6: Proofread Your Return

This isn’t just a tax tip for 2020, but for every year: make sure your return is error-free. The most common cause of delays and manual resubmission is human error – typos. Check your math, and always make sure you forms are properly filled. Keep a copy of the submitted tax filing for your records. Ensuring your return is correct will get you any refund you are owed faster – and keep you out of LHDN’s sightlines for an audit.

Tax Tip #7: File Electronically

Of all our 2020 tax tips, this one makes your life the easiest. When you file using electronic software or hire a professional to file your taxes you’ll have a built-in fact checker and proofreader. You get a 15 day extension for filing online as well. Most importantly, your return will be processed faster, meaning you get any refunds faster.

Want more tax tips for 2020 and beyond? Discover key advice on tax tips and advantages with a free MyPF Premier membership.

 

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