Gen Z, Did You Know That The Tax Deadline Has Been Extended?
Text Iris Lee/imoney.my | Additional reporting Yeong Hui Min | Image credit Designed by macrovector/Freepik
Due to the Covid-19 outbreak and the Government’s Movement Control Order, the Inland Revenue Board (IRB) premises will be closed from 18 to 31 March, and the last day to file your tax returns has been extended by two months from the original deadline.
So, what can we do now? IRB has encouraged us to submit our income tax forms and tax payments online via their ezHASIL online platform. Gen Z, if you’re feeling a little lost filing your taxes for the first time, don’t worry ’cause we’re here to help you.
Filing your income tax for the first time should be a happy occasion as it means you are finally earning and receiving a regular paycheck. However, it can get a little intimidating when you are met with a big pile of receipts and documents before you even get started. Resist the urge to sweep it all into your drawer for another day and going into panic mode when the deadline nears, especially if it’s your first time and you are unfamiliar with the entire process. These simple tips can help you prepare for this important step in your working life.
Step 1: Find out what to do when you qualify
You should start planning early so that you can maximise on the tax reliefs you are given and ensure that you don’t miss out on any tax savings you qualify.
First, find out how much your annual income is. If the total is RM34,000 or more, then you need to declare your income to the government.
Next, you need to register online with the Inland Revenue Board (IRB) (Note: an identification document is required for this step) Next, register for an e-Filing account (You must physically go to the nearest IRB branch to get your e-Filing PIN). Log in online with your PIN to get access to e-Filing.
Step 2: Prepare The Necessary Documents
Once you’re registered, now you can start filing your taxes. Congratulations on reaching this adulting milestone! Before you file your first income tax, make sure you have the following documents ready: (1) EA form provided by your employer (2) EPF statement if needed (you can find this online) (3) Receipts/Invoices to claim for reliefs, rebate and/or exemptions
Step 3: Know Your income tax Terms
Here are some tax terms you should be prepared to come across when filing your taxes for the first time.
MTD or PCB: If you are employed full time, your employer will be deducting your salary monthly in the form of Monthly Tax Deduction (MTD).
Chargeable income: The amount that is left after you deduct all the exemptions and reliefs you are entitled to.
Tax exemptions: The parts of your income that you don’t need to pay tax on.
Tax reliefs: The cost of purchases and activities that you can deduct from your chargeable income.
Tax deduction: This is to deduct a fixed percentage of your chargeable income if you have given away a certain amount of your income in the form of gifts and donations.
Tax rebate: The last part where you can deduct from the total tax payable (mainly for zakat and spousal allowance)
Tax return: The amount that you overpay in tax (mostly for employees paying MTD/PCB) and is refunded to you
Step 4: File Taxes online or go in person
When you are confronted by the options onscreen after you log in to the e-Filing website, don’t panic. Select e-Form and as a first jobber, you are most likely to be in the category e-BE for individuals and if you are filing in 2020, the tax year you select is 2019.
You can check out iMoney’s step-by-step income tax guide to walk you through the entire process to filing your taxes online.
If you prefer to do your income tax manually, you can always head to the IRB branch nearest to your home or office (after 31 March). You are also allowed to use registered tax agents if you prefer to pay someone else to do your filing.
You can also use iMoney’s income tax calculator to find out how much you can save in tax reliefs this year.
Breeze through tax season like a #boss:
- Deadline for manual tax submission is 30 June for manual submissions and e-Filing for personal income tax. Mark the date on your calendar!
- Make a copy of your e-Filing transaction by downloading a PDF copy on your computer in case you need to refer back in future.
- Keep all the receipts you use in your tax deductions and tax reliefs for 7 years (this is required by law).
- If you have missed the tax deadline, you can and should still file your tax. For late filing, you will need to pay an 10% increment on top of the tax payable and additional 5% on the balance if the payment is not made after 60 days of the final date. You can check the complete list of fines and penalties imposed by IRB for tax offences here.
*This story was originally published on CLEO Malaysia’s Mar/Apr 2020 print issue.