Significant expansion of credit card income deduction benefits due to Corona 19
The pension account tax credit limit is temporarily increased.
(Photo = Getty Image Bank)
13 month salary or tax bomb. The year-end settlement time has come when disappointments can be as great as expected. It’s a year-end settlement every year, but it’s confusing because the documents you need to bring are different each time.
In particular, this year, there is a change in the year-end settlement in the aftermath of the novel coronavirus infection (Corona 19), so a thorough check is essential. Until the end, let’s see how you can increase your year-end settlement refund.
According to related industries on the 20th, the year-end settlement simplified service began on the 15th through the Hometax website. This year, hometax access is also possible with private certificates, making it more convenient.
In this year-end settlement, the biggest difference compared to the previous one is that the credit card deduction benefits have increased significantly.
The existing deduction rate is 15% for credit cards and 30% for cash receipts and debit cards. However, the deduction rate for credit, debit card, and cash used in March of last year was doubled, respectively, and the deduction rate of 80% is applied to the amount used from April to July regardless of payment method.
The credit card income deduction limit by income was also raised by 300,000 won per section. If the total salary is 70 million won or less, it has increased from 3 million won to 3.3 million won, and if the total wage is 70 million to 120 million won, it has increased from 2.5 million won to 2.8 million won. The limit for deduction on credit cards for high-income earners exceeding 120 million won has also increased from 2 million won to 2.3 million won.
Thanks to this, if the credit card was used similarly to the previous year, it is expected to be able to receive an additional 50,000 to 100,000 won.
(Photo = Getty Image Bank)
In addition, the pension account tax credit limit has been temporarily increased. This is an additional increase in the pension account payment limit for three years from 2020 to the end of 2022 for workers over 50. A total of 2 million won increased from the default 4 million won limit to 6 million won. However, this does not apply to workers whose total salary exceeds 120 million won or interest dividend income exceeds 20 million won.
Infertility treatment expenses paid by infertile couples for pregnancy can be deducted up to 20% as medical expenses without limit, and workers with a total salary of 70 million won or less can be deducted up to 2 million won for postpartum care. According to the Employment Insurance Act to facilitate male parenting participation, spouse maternity leave benefits are not taxable and are not included in gross wages.
From this year-end settlement, it is also possible to automatically search the National Tax Service’s hometax for △public rental housing monthly tax credit △eyeglass purchase cost △ineligible medical insurance payment △emergency disaster support donation.
On the other hand, △children’s overseas education expenses △preschool children’s school expenses △private rental housing monthly rent △donations, etc., which are not checked by the year-end settlement simplification service, must be collected by individuals.
In order to make year-end settlement even a little more advantageous, it is effective to drive personal deductions to high income earners with a high tax base and high applicable tax rates. Conversely, it is advantageous to deduct the medical expense tax credit to a spouse with low income.
How about finishing a little cumbersome and cumbersome year-end settlement with a 13 month salary with a smart income deduction strategy?
Eunji Cha, reporter Hankyung.com [email protected]