IRAS Give an option for income tax return to be submitted for a family unit
The IRAS is breaking up the family unit. It is causing problems to some families. 

Let me explain what has happened.

My wife is a home maker. She does not have any source of income on her own. 

A long time ago, I was able to submit an annual income tax return for the family, including her income. 

Several years back, IRAS changed the system to require each adult to submit their own income tax return. They disallowed a person to submit a return to include the spouse.

As she did not have any income of her own, she did not submit any return. This appeared to be in order.

All along, I have declared 100% of the rental income as my income and  paid tax on the entire rental income.

Last year, or the year before, IRAS went back many years to recompute my income tax to take only 50% of the rental income. IRAS added 50% of that income to my wife's return. They said that the two rented properties were jointly owned.

I had to pay income tax on my wife's income, but I got a refund for the excess tax that I had been paying. After netting off, I had a refund. I was not happy with this arrangement. I found this adjustment to be unnecessary and troublesome. I did not need the refund. Anyway I was too tired to bother about it.

The position taken by IRAS was factually wrong. Although my wife is supposed to be a joint owner, the entire rental income goes into my bank account and our family expenses are paid out of that.

This year, I submitted my income tax return showing 50% of the rental income. I could not submit the return for my wife as she did not get her form. I could not access her IRAS account online, due to the need for user ID, password, 2FA, etc. 

My wife is not able to submit her return. She is not familiar with the process. She does not have internet access.

I waited for IRAS to send her the manual form. It must have arrived, but was overlooked. We now have to pay a fine of $150 for the non submission of the return, which will later to be increased to $1,000 if it is not complied with.

I am still not able to submit the income tax return for my wife.

I do not understand why IRAS has to break up the family unit and require each spouse to submit their own return. I do not understand why I am not able to declare the entire rental income on my return.

It is astonishing that IRAS is creating a lot of unnecessary work for the civil servants and trouble for the taxpayers, and does not seem to serve any useful purpose.

IRAS should give an option for families in this situation to submit a joint annual income declaration. It was the practice a long time ago. Alternatively, they should allow the rental income to be declared under one taxpayer, instead of asking for the income to be split.

Other families whose spouse have separate income, can continue to submit their returns separately.

Heng SK - are you listening? Can you get IRAS to change their practice?

Tan Kin Lian

Vote - is this a stupid process from IRAS?



 

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