Hello Grasshoppa,
It’s that time of the year again when most Malaysians start to think about year-end sales, holidays & bonuses. But if you’re financially smart, you’ll know there’s something even more important to plan for your tax savings. The year is closing soon, & if you haven’t reviewed your tax relief opportunities yet, now’s your chance to take advantage of every ringgit you can legally save before the clock strikes midnight on December 31st.
Let’s talk about how you can make the most of your tax rebates & reliefs before the year ends.
First, maximize your EPF & life insurance reliefs. You can claim up to RM7,000 for contributions to EPF & life insurance premiums (for those with employment income). If you’re self-employed or running your own business, contributing voluntarily to EPF or PRS (Private Retirement Scheme) can help reduce your taxable income while building your retirement fund. PRS contributions come with an extra RM3,000 relief, & it’s one of the most underutilized tax-saving tools in Malaysia.
Second, don’t forget about lifestyle reliefs. You can claim up to RM2,500 for lifestyle expenses like books, smartphones, tablets, or even your Netflix subscription (yes, entertainment can be tax-efficient too!). If you’re planning to buy a new laptop or upgrade your phone, do it before the year ends & keep the receipt. There’s also an additional RM2,500 relief for laptops, smartphones, or tablets purchased for work-from-home purposes, introduced during the pandemic but still available.
Third, take advantage of medical & insurance reliefs. You can claim up to RM8,000 for medical expenses for yourself, your spouse, or your parents. This includes full medical check-ups, vaccinations, & even mental health consultations. For parents, you can claim RM1,500 per parent if you’re supporting them financially, provided their total income is below RM24,000 a year. These are often overlooked but can make a huge difference in reducing your taxable income.
Fourth, donate smartly. Many don’t realize that donations to approved organizations or foundations under LHDN can be tax-deductible up to 10% of your aggregate income. Instead of giving blindly, check if the organization is listed under LHDN’s approved list, that way, your generosity can help others while helping your taxes too.
Fifth, education & upskilling. If you’re planning to enroll in a new course or certification that’s relevant to your career, you can claim up to RM7,000 under education fees. For example, if you’re in finance & take a CFA course, or you’re an entrepreneur investing in a business management program, that’s a deductible expense you can benefit from while growing your skills.
Lastly, invest in tax-efficient tools like SSPN (National Education Savings Scheme). Parents can claim up to RM8,000 for deposits made into SSPN accounts. It’s a great way to plan for your child’s education while reducing your taxable income, a true win-win.
As we approach December, it’s a great time to review all your expenses & reliefs. Gather your receipts, check your contributions, & plan the next few weeks wisely. Every ringgit you save from taxes is a ringgit you can reinvest, save, or spend for your goals next year.
Remember Grasshoppa, being smart with your taxes isn’t about cheating the system, it’s about understanding it. The wealthy don’t just earn more; they know how to keep more of what they earn.
OSS!
