OH MY GOD! You haven’t changed at all since I last saw you years ago! Still look so young and pretty!
, exclaimed the well-dressed Tai-Tai A as she gave Tai-Tai B a big hug over a table at Starbucks.
Don’t flatter me lah. *Hiaz* My two kids have been giving me sleepless nights all this while. In fact, I’ve just seen the school principal after one of them was allegedly involved in a big fight in some rugby game *smacks forehead*
How’s life for you?
, asked Tai-Tai B.
Same old routine everyday. Shopping, gym and spa in the day. Mahjong at night if I can gather the girlfriends. Plus the occasional weekend shopping trip to Japan and Korea. Life’s getting boring to be honest.
, replied Tai-Tai A, as she twiddled her exquisitely manicured fingernails.
Wow enjoying life huh? I still have to take care of my two kids, and face my two parents-in-law every day as they are living with us in our HDB flat!
, protested Tai-Tai B.
Gosh you are still living with his parents??? My husband and I moved into our spanking new condo the day we got married. Till now no parents, no kids – just a new convertible sports car we bought last year Haha.
Tai-Tai A‘s fingers moved slowly to caress the 1-carat diamond on her ring.
Ooh I’m so envious! And to make things worse, I have to handle everything by myself every time my husband gets called up for those stupid NS stints!
, complained Tai-Tai B.
The you should have married a PR like what I’ve done! No NS! Hee hee …
It’s now Tai-Tai A‘s LV bag’s turn to be fondled.
Eh tomorrow’s tax filing deadline. You filed your taxes already?
Yes I just helped my husband calculate his income last night.
Oh so how much did your husband earn last year?
Errr … can don’t say or not? Embarassing lah especially when compared to yours! Let’s just say that his total tax payable is 4% of his total annual income.
Oh I see. We did ours last night too and my husband’s total tax payable is 6% of his total annual income. Oh well … earn more pay more … what to do? *Sigh*
As Tai-Tai B‘s face began turning green with jealousy, unbeknown to them, a kaypoh maths tutor had been busily eavesdropping on their entire conversation from the next table. And being unable to tolerate Tai-Tai A‘s hao lian bitchy attitude, she began to stroke the keys on her calculator in an attempt to find out exactly how much their husbands were earning …
As stated, Tai-Tai A‘s husband’s total tax payable is 6% of his total annual income and Tai-Tai B‘s husband’s total tax payable is 4% of his total annual income.
Given that both Tai-Tais are not working (obviously, else they won’t be Tai-Tais), and that their husbands are entitled to the following reliefs, where applicable (Source: IRAS 2009):
- Personal: $1000
- Parent: $7000 per parent staying with them / $4500 per parent not staying with them
- Spouse: $2000
- Children: $4000 per child
- NSMan: $3000 where applicable
Using information from their conversation above and IRAS 2009 tax rates below, calculate the total annual income of each husband to find out whose husband earns more.
| Chargeable Income | Rate (%) | Gross Tax Payable ($) |
|---|---|---|
| First $20,000 Next $10,000 | 0 3.50 | 0 350 |
| First $30,000 Next $10,000 | – 5.50 | 350 550 |
| First $40,000 Next $40,000 | – 8.50 | 900 3400 |
| First $80,000 Next $80,000 | – 14 | 4300 11200 |
| First $160,000 Next $160,000 | – 17 | 15500 27200 |
| First $320,000 Next $320,000 | – 20 | 42700 |
While it’s highly unlikely that you’ll be asked to read through such a lengthy bitchy conversation in an actual exam question on the minor topic of taxation, there’ll still usually be a wee bit of reading comprehension involving the basics of calculating taxes i.e.
- All mortals are taxed on their
Chargeable Income = Total/Gross Annual Income − Reliefs - Find out which row in the given tax rates table the chargeable income falls into.
By the way, Tai-Tai A just asked again …
