Guess what happened this week? I just completed my online submission of my 2018 tax assessment and realised that I have reached a critical milestone in my tax paying career…
I discovered that my tax deductions were more than my income for the first time in my work career!!! Does that mean I can get a tax refund from the government now? Fat hope. Well, at least it could mean that I may not need to pay any taxes this year 🙂 I guess that this is fair, given that I have paid a lot of personal income tax over my 28 years of work. It is time that I try to enjoy a bit of the tax dollars I had invested in the country, no?
Ironically, the highest amount of tax I had ever paid in my life occurred in 2012, the year after I was retrenched from the American bank I had worked in for the past 19 years. I was “lucky” that it occurred at the peak of my career where I had the highest monthly pay as my knees were being cut off, the rug being pulled from under my legs. There was additionally a bank pension plan that I was entitled to and they allowed me to cash that out too. Also, it was kind of them to immediately vest all my outstanding uninvested shares and stock options. All in all, the pension and retrenchment benefits accrued equated to an upfront payment of about 3 years of my basic salary at that time. As a result, the subsequent tax owed to Uncle Sam exploded big time.
It did not help that I could not find a new job for almost 10 months after that. For the next job I finally managed to get, thanks to an old boss, I had to also eat a massive 40% cut in pay. So it was a double whammy for me that year, where my monthly tax bill consumed more than 70% of my new monthly salary. This was indeed a painful 12 months. I had to dip into the retrenchment funds to bridge over this gap.
My last working day in my last job was Jun 2017, another painful episode after working for only 8 months in a European bank. The guy that hired me lost his job 3 months into my start date. They were nice enough to give me 3 months of gardening leave though. So in 2018, I had to continue to pay taxes because technically, I worked from Jan to Sep 2017.
As luck has it, an opportunity came along in Jan 2018. It was a monthly financial advisory role in Myanmar which I talked about in my previous blogs. They covered my flight and accommodations there and only gave me a token sum for every trip.
So back to the topic this week. I finally submitted my tax returns online this week and was pleasantly surprised to see that I had a net negative income number after taking in all deductions! I had some rental income and was still expecting to pay a small amount of tax per month, maybe a 90% drop from last year. But it seems very likely that the number will be closer to zero 😉
Over the last few years, the government has also been encouraging the concept of life long learning for older workers as a means to learn new skills to keep up with the latest work opportunities available. This was the SkillsFuture initiative which I had wholeheartedly embraced.
It has re-invigorated me to want to learn and absorb new knowledge. Besides a starting amount of $500 to help kick start the learning process of each individual, they also have a 90% subsidy for citizens above 40 years old for most of the 25,000+ available courses available.
I have already done quite a number of them and with a quick back of the envelope calculation, I believe that I have enjoyed more than $10k of subsidies to date. This is another way for me to take back my tax dollars 🙂
There is certainly life after 50. It is about how you want to frame your journey ahead. I just want to stay happy and healthy. This baseline helps me build multiple branches to achieve these twin goals and keeps me actively occupied. Halftime is about significance, what you want to give back and be remembered for. There are a lot of opportunities nowadays if one digs deeper. A positive attitude is a must. When one door closes, another one will open. It makes life so much more exciting.
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