I went out to collect my baby’s Birth Certificate and changed the residential address on my NRIC at ICA this morning. The entire process of taking the bus and train to the ICA Building, go through the 2 processes and get back home took 1.5 hours (door-to-door).
Wanted to test my public transport errand running time and my wife was surprised to see me back so soon. Good that things are fast and efficient here in Singapore. It would have been quicker using private transport but my father-in-law went groceries marketing for the confinement nanny. Useful to test out all the transport options available to us.
Anyway, hopefully this is our last errand for the week since we have been heading out every day since Monday. Feeling tired but I have also been thinking of going back to work earlier, most likely this Friday. Even though I have been monitoring my work emails daily, I reckon it might be helpful to catch up with my manager on current and outstanding work matters first.
Just to better prepare for my proper return to work next Monday. Besides, I also want to know how well or badly I function in the office from lack of sleep due to the overnight feeding. I might have to sleep through some of the feeds (my wife will have to handle them with the confinement nanny) so I can be better rested for the work day. We shall see how this works out.
Moving on to the focus of this post. One of the benefits that comes with having a child is the tax reliefs available to us as first-time working parents. All the work that my wife put in to become the higher-earning spouse is about to pay off income tax wise. Since a working mum is able to access more tax reliefs than a working dad. Which means my wife can use them more effectively as the higher-earning spouse compared to me.
This is how we are planning to utilise the tax reliefs (to reduce taxable income) now available to us as first-time working parents. Yay to more tax savings.
Qualifying Child Relief (QCR)
My wife will claim the entire QCR of $4,000 even though we know it can be apportioned between the both of us.
Working Mother’s Child Relief (WMCR)
Since this is the 1st child, only my wife can claim 15% of her earned income as WMCR.
The combined relief of QCR and WMCR for my wife will not exceed $50,000.
Grandparent Caregiver Relief (GCR)
Only my can claim the entire GCR of $3,000.
A quick calculation of my wife’s total amount of personal income tax reliefs shows that it is below $80,000 for the year.
Lastly, this is not a tax relief but a tax rebate i.e. reduces tax payable.
Parenthood Tax Rebate (PTR)
Since this is the 1st child, my wife will use up the entire PTR amount of $5,000 to reduce her income tax payable for the year.
By my calculation, my wife would still end up paying more income taxes than me for the year after going through the above steps. With my recent job change, I will aim to narrow this income gap between me and her. This will allow her to cruise at her current job for a while without aiming for the next promotion and pay jump. Then she can appreciate the joy of motherhood even more.
Congrats on the new addition to your family And thank you for your sharing all these that you are doing for your newborn and family. It has been really useful and great reads as recently my newborn just arrive and I am in almost the same phase as you are. Cheers and thankful to your posts I am following to pick up some info. Hope you will continue to share your experiences!
Thanks and congrats to your newborn baby too! No worries, it’s useful for me to write about our experience so we can remember and learn from it. I’m glad it benefits you too!