TAX PLANNING
When Christmas arrives the tax year-end quickly follows. So before your new year’s resolutions, commit to ending the tax year positive. Tax rates are 20% and 35% on the higher band in some countries. Each $100 invested in a tax instrument will return 20% to 35% depending on your tax scale. In other words, you can get up to a maximum tax return of $35 for each $100 invested. So plan your Christmas shopping with the Mutual funds or Credit Unions to have a Merry Christmas next year when your tax return comes in next year.
Governments provides us with many free or minimal cost social services such as education, medical care, policing, sanitation, roads, fire and the list goes on. Our society would be in chaos and only the privileged would have the resources to exist in an environment where we have to pay for everything.
The following is a guide for the Barbados Pay As Your Earn Taxes:
Contributions to Registered Retirement Plan / Savings Plan - 15% of assessable income or $10,000 which ever is the lesser.
Payments under Covenant to: - Benevolent Organizations. 10% of assessable income - Minors / incapacitated individuals. 5% of assessable income.
Subscriptions to Trade Unions / Statutory Associations - Up to $240 annually.
Home Allowance - An amount up to $10,000 in respect of expenditure of mortgage interest.
Environmentally Preferred Products - Products that cause less harm to human health or the environment than alternative products that serve the same purpose – max $5,000 per owner occupied property.
Rent Deduction - An amount equal to 20% of the rent paid in respect of residential property or $3000 whichever is the lesser.
Retrofitting - With roof straps and window shutters - an additional amount of $2,500.
Shares in Co-oporative Societies - Investment in shares in Co-operative Societies up to a maximum of $10,000.
New Shares purchased in a Public Company - Cost up to a limit of $10,000.
Mutual Funds - Amounts up to $10,000 invested in the fund.
Combined Deduction - A maximum of $10,000 is allowed as a deduction in respect of a combination of investments made in mutual funds, new shares bought in a public company and shares in co-operative societies.
Venture Capital Fund - Contributions made up to a maximum of $10,000 in an income year.
Your Personal Tax Planning should ensure your own long-term financial security by providing a tailored tax planning strategy for peace of mind. Tax planning will also give you a better understanding of your remuneration / compensation package.
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Hear with your ears.
Financially Fit
