The season of cold winds is approaching, and the time to wrap up the year is approaching.
Today, I have prepared how to properly do year-end tax settlement and what things have changed this year.
Please tell us the detailed story from Lee Eun-hye, an economic reporter.
With the end of the year approaching, today we looked at how to effectively do the year-end tax settlement, also known as the 13th month’s salary.
Year-end tax settlement is the settlement of excess or deficiency of tax withheld from salary income at the end of the year. This means paying more taxes during the year and receiving a refund for taxes paid more.
If you want to get more deductions, it’s a good idea to check your credit card spending by now.
If your credit card usage already exceeds 25% of your total salary, using a check card with a high deduction rate from now on will help you save taxes. The deduction rate for credit card usage is 15%, but for check cards and cash receipts, it is 30%.
One thing to note at this time is that although utility bills are often automatically paid with credit cards these days, utility bills and insurance premiums are not eligible for credit card deduction, so they must be deducted from the payment amount. In addition, in the case of a married couple, if the husband’s credit card usage exceeds the deductible limit, it is better to set the deductible to the maximum because you do not know the wife’s card spending.
If you have extra money at the end of the year, paying it into a pension account is an effective tax-saving strategy. If your total salary exceeds 55 million won, you can receive a 15% tax deduction if it is 12% or less. You can receive a tax deduction of up to 9 million won per year.
What has changed in this year’s year-end tax settlement?
First of all, the deduction limit for medical expenses for infants and children under 6 years old has been abolished, so the entire amount spent can be deducted. The income standard for deduction for postpartum care has also been abolished.
The limits and standards for housing-related monthly rent tax deductions have also been expanded. The upper limit of total salary subject to tax deductions has increased from 70 million won to 80 million won, and the deduction limit has also been raised from 7.5 million won to 10 million won.
The National Tax Service started a year-end tax settlement preview service on the 15th. You can check next year’s expected tax amount based on credit card usage up to last September, so it would be a good idea to check it out in advance.
It was an economic briefing.
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- How do the recent changes to the year-end tax settlement affect families with young children?
Welcome to World Today News. Today, we have two esteemed guests with us to discuss the importance of year-end tax settlement and the changes made this year. Firstly, we have Lee Eun-hye, an Economic Reporter who recently broke the story on year-end tax settlement. And also with us is our tax expert, Hyeon Jae-min, to provide further insights on the topic.
Lee Eun-hye, can you please tell us more about the year-end tax settlement and how it affects individuals and businesses?
Lee Eun-hye: Of course. The year-end tax settlement, also known as the 13th month’s salary, is the settlement of any excess or deficiency of tax withheld from salary income at the end of the year. It’s important for both individuals and businesses as it allows them to have a clear understanding of their tax liability and plan their finances accordingly. For individuals, it helps to ensure they don’t overpay or underpay their taxes, while for businesses, it ensures compliance with tax laws and avoids any penalties.
Hyeon Jae-min, what are some key changes that have been made to this year’s year-end tax settlement?
Hyeon Jae-min: There have been a few changes in this year’s tax settlement. The deduction limit for medical expenses for infants and children under six years old has been abolished, meaning that the entire amount spent can now be deducted. The income standard for postpartum care deduction has also been abolished. In addition, the limits and standards for housing-related monthly rent tax deductions have been expanded. The upper limit of total salary subject to tax deductions has increased from 70 million won to 80 million won, and the deduction limit has also been raised from 7.5 million won to 10 million won.
Lee Eun-hye, how do these changes impact individuals and families?
Lee Eun-hye: These changes are mainly aimed at providing further tax relief for families with children. By abolishing the income standard for postpartum care deduction and raising the deduction limit for childcare expenses, the government hopes to ease the financial burden on families with young children
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