had found the chaplet to be a fascinating device as a child, not
unlike the abacus, or the prayer beads of my family. Now I know
these were digital systems, the same used by Microsoft to revolutionise
access to all information.
lets clear up some doubts about tertiary education claims,
and count up the money thats coming back to us via tax deductions.
This is important information for completing your Tax Declaration
Form 1the TD1.
addition to tertiary education, you can claim for individual annuities
as we saw last week, or as a first-time homeowner, or for alimony/maintenance,
which we will cover next week.
current tertiary education claim does not apply to local institutions,
where tuition is now free.
January 1999 to 2006, the maximum claim per taxpayer was $18,000
per year. Since 2006, the claim has been restricted to foreign schools.
Effective 2007, the claim was raised to $60,000 per householdan
effective increase from $36,000 per two-parent household.
evidence required includes a statement issued by the institution
certifying full-time enrolment for a minimum of one academic year.
To get the TD1 approved you must provide evidence of payments for
the current academic year. When filing the tax return, evidence
of payments is necessary.
fare claims are limited to one return airfare per year, evidenced
by an actual ticket stub. Rental receipts for housing are also accepted.
you took an education loan to pay for the education, the interest
charges can also be claimed.
experience with the BIR is that whereas an academic year tends to
span two calendar years, commonly commencing in September of one
year and ending in May of the following year, the BIR required evidence
per calendar year respective to the claim.
can create a difficulty if all the fees for the academic year are
paid in August of year 2007, for example, and it exceeds the total
claim amount for 2007. You are frustrated in that you cannot submit
a claim for 2008 since you didnt pay anything in calendar
solution is to pay fees per semester, so you can utilise your claim
amount each year. This is relevant since undergraduate degree programmes
cost about US$30,000 per year, or $170,000.
frustration occurs if you pay academic fees online. Every online
fee payment generates an online receipt within seconds of the payment.
I am told BIR is not accepting the online receipts.
developed world is overtly digital!
is quite a headache to get foreign institutions to issue receipts
of payments from the bursars office after a period of time
has elapsed, especially if the student is no longer at the school,
having graduated and left the institution.
summary then, for income year 2008, if you utilise the maximum individual
annuity or pension claim of 25,000, and your maximum tertiary education
claim of 60,000, you will pay no tax on $85,000 of income.
we add your personal exemption of $60,000, then you can earn $145,000
tax freeyou save $21,250 from the tax man!
we still use the abacus to teach our children, and hold fast to
the chaplet, but were lagging behind in the digital interface.
I wish BIR would accept the digital receipts; after all, they are
generated from a secure site.