Father Sez

From and to parents - parental advice to our children on personal financial management and life.
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Archive for the ‘Taxes’ Category

A part of whatever you earneth, the taxman taketh

Wednesday, April 15th, 2009


This lesson has just been reinforced upon my second girl, Azah. 

She is an accounting graduate, so she is well aware of the need to pay taxes etc. Still there is no better teacher that the act of having to pay taxes herself.  

She started work with an accounting firm in July last year. As is required under our Malaysian tax laws, her employer prepared a certificate of her earnings and sent one copy to the Lembaga Hasil Dalam Negeri, (as we call our Inland Revenue Service) and gave another copy to my daughter. 

In the old days, the next step would be to fill up and file a stack of forms that the IRS sends to every taxpayer early each year.  Now it’s all online. The deadline for filing is 30 April.  

As she was a first time tax filer, she needed a PIN for her account. I took her particulars to the local LHDN office and got her PIN. I suppose, strictly speaking, they should have insisted that the number be given only to the tax payer. But then, I am the father and I had the documents to prove it.  

Her earnings for the year are below the taxable threshold, so she should not be paying any taxes. In any event, Malaysian employees are all put into a PAYE system where the estimated taxes for the year are calculated upfront and deducted from the wages monthly.  

Last Sunday we did her first filing together. I did the logging in etc., whilst she sat beside me. We went through the process of filling up her personal info, her earnings, the deductions allowed for her and the net results. The process took only about 15 – 20 minutes.

The lessons learnt were deep. Azah realized the need to keep proper documents and receipts, and that there were allowances for her insurances, books and computer purchased. 

This year, she managed to file her taxes well before the deadline. I wonder how her next year’s tax filing experience would be. 

Tax filing for Malaysians – it’s a little less taxing now

Tuesday, April 22nd, 2008

We have to file our personal tax returns by the 30th of April each year.  

Our IRS used to ask us to submit a stack of forms yearly. With chunks of repetitive information, like, addresses, identity card numbers, birth dates, Employment Provident Fund Membership numbers, names of children, wedding date etc.  

I used to mumble unhappily each year as I did the taxes for my wife and myself. But we had no other options available.   

A couple of years ago, our IRS allowed online filings.  The first year, the system rejected me as being too young for e filing!!!! So I had to go back to manual filing. Last year, the IRS office in my town set up a number of computers in their office lobby to guide the people to do their filings online. My wife and I took advantage of this and after a few computer “dead ends and run arounds” (which were resolved with the help of the IRS people in attendance), managed to file our returns. 

This year it turned out to be a piece of cake. It took about 15 minutes or so to complete and submit the returns for my wife and myself.  Of course the fact that we are pretty well organized with our documentation helped. 

Still, I must pay tribute to the IRS for the improvements made in the system. The fact that the system “remembered” the repetitive information made the whole process a lot easier. 

And like every other tax payer before me and I am sure, every other tax payer after me, I tried my best to look for deductions that would reduce my taxes. But I am still figuring out how buying 700 cars may help reduce my taxes.   

When I complained about my taxes, the IRS told me I should appreciate the facilities my taxes are used to pay for. Hence I should pay my taxes with a smile, they said. I did that and they told me they preferred cash!


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