National Tax Service to open a simplified system on the 15th of next month
Card deduction rate April to July 80%… The limit is raised by 300,000 won
Actual loss insurance is not subject to medical expenses tax credit
Redundant deduction for medical expenses and preschool children’s school expenses card
Automatically reflect data on eyeglass purchases, loss insurance, and donation for disaster support
‘Will it be a bonus in 13th or a tax bomb?’ The year-end settlement season is back. This year, as a support measure for the new coronavirus infection (Corona 19), the income deduction rate for credit card usage has increased significantly from March to July, and the deduction limit has been raised by 300,000 won. In addition, the limit for payment of pension accounts subject to tax credits for those aged 50 and over has been temporarily increased by 2 million won for three years, and a tax credit for medical expenses has been added for the total wages of workers under 70 million won for postpartum care. However, as in the previous year, the amount of in-house student aid and medical insurance for indemnity are excluded from deductions, and it is necessary to carefully check whether there is an unfair deduction to avoid the unexpected burden of additional tax.
According to the’Comprehensive Guide to the Year-End Settlement of Earned Income attributable to 2020′ released by the National Tax Service on the 23rd, all workers (excluding daily workers) who earned earned income this year must pay for the year-end settlement until February of next year’s wages. The National Tax Service will provide convenient year-end settlement services from the 15th of next month, such as simplified service deduction certificate data, YouTube tax saving help data, and real-time counseling service for Hometax’s’year-end settlement chatbot’.
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■Card deduction rate 80% from April to July… The limit is increased by 300,000 won
This year, credit card deductions have been greatly expanded. Income deductions such as credit cards are obtained by multiplying the amount used in excess of 25% of the total salary by the’deduction rate’. The existing deduction rate is 15% for credit cards, 30% for cash receipts, 30% for check cards, 30% for books, performances, museums and art galleries (total salary less than 70 million won), traditional markets, and 40% for public transportation. Depending on the type of card and where it is used, the deduction rate, which is 15-40% in January-February, is doubled for each usage in March and rises to 80% in a batch from April-July. The amount used from August to December is the same as the deduction rate from January to February. Income deduction limit: 3 million won for workers under 70 million won in salary, 2.5 million won for workers with 70 million to 120 million won in wages, and 2.5 million won for workers over 120 million won, increasing by 300,000 won from 2 million won to 2.8 million won, respectively. , It was 2.3 million won. The amount of use of traditional markets, public transportation, books, performances, museums, and art museums can receive an additional income deduction of up to 1 million won each, regardless of this limit. In particular, if you spend medical expenses, school expenses for preschool children, and school uniform purchases by credit card, you can receive deductions for medical expenses, education expenses, and credit card income deductions. Instead, insurance premiums and donations are only tax deductible without credit card deductions.
For those over 50 who need to prepare for retirement, it is advantageous to receive additional tax credits through additional payment of pension savings if they have extra funds. However, the total salary should not exceed 120 million won and interest and dividend income should not exceed 20 million won. The limit has been increased to 6 million won, a 2 million won increase from the previous 4 million won limit, for a temporary period of 3 years, and in addition to a retirement pension (IRP) account, it is possible to deduct from the 7 million won limit to 2 million won up 9 million won. . Pension savings products provide a tax credit of 16.5% of the subscription amount.
In addition, if a worker or spouse with a total salary of 70 million won or less uses a postpartum care center, medical expenses can be applied up to a limit of 2 million won. Spousal maternity leave benefits are non-taxable earned income and are not included in the total wages. Workers in service industries, such as creative arts, sports, libraries, historic sites, and similar leisure-related service industries, are also eligible for a reduction in income tax (70% for 3 years) for employees of SMEs. Marriage and child education are added to the reasons for career break women who receive a 70% reduction in income tax, and the period of career break is extended to 15 years after retirement.
■Be careful not to incur additional taxes due to unfair deductions
As important as the tax savings strategy is that you shouldn’t accidentally receive unfair deductions and pay penalties. In general, items that are often wrong in year-end settlement are personal deductions for dependents with income exceeding 1 million won, duplicate deductions for children of dual-income workers, duplicate deductions for siblings’ parents, and unfair deduction for housing funds or monthly taxes. If there is an error in the personal deduction for dependents, in addition to the basic and additional deductions, special deductions (insurance premiums, education expenses, credit cards, donations, etc.) of the family who incorrectly applied the personal deductions are also excluded. have.
For example, a worker with a total salary of 120 million won applied a deduction for dependents and a special deduction (insurance premium 1 million won, credit card usage 10 million won, donation 10 million won) to his mother, but A’s mother It was not subject to personal deduction because it had a capital gain of 30 million won. Therefore, as the basic deduction of 1.5 million won, the additional deduction of 1 million won, and the credit card income deduction of 2.8 million won decreased, the tax base of Mr. A increased by 5.3 million won, and the contribution tax deduction and insurance premium tax deduction were reduced. You have to vomit 3.67 million won until the penalty tax. In particular, there are many items in which the deduction or the amount of deduction depends on the total salary, such as earned income deduction and monthly tax deduction, and there are items that are only eligible for deduction, so it is necessary to pay close attention.
It is also necessary to note that medical expenses paid with insurance money received from insurance companies are not deductible, and medical expenses directly expenditured by workers are subject to deduction. If a religious organization pays income to a religious person, the payment statement must be submitted by March 10 of the following year, regardless of withholding tax and year-end settlement.
From this year on, the National Tax Service collects and provides data on the monthly rent of public rental housing, the cost of purchasing glasses, the amount of insurance payments received, and the donation of the first emergency disaster support fund in the year-end settlement simplified system. An official from the National Tax Service said, “We ask you to faithfully report on the types of unfair deductions that are likely to occur frequently so that there are no additional details.”
/ Sejong = Reporter Hwang Jeong-won [email protected]
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