Preview of the year-end tax settlement of the National Tax Service
This service is available at Hometax (www.hometax.go.kr) from the end of October. You can check your usage history, such as credit cards, until September of this year, and refer to how much you have spent with any payment method over the past nine months to devise an optimal strategy for tax savings for the remaining two months.
🙋 What is the year-end settlement?
It is a process of comparing 'taxes I have already paid' with 'taxes I have to pay', and those who paid more will be refunded, and those who paid less will have to pay more.
When the government sets taxes, some of our circumstances are taken into account, and when we act in line with the direction of government operation, the tax burden is reduced.
One of them is 'income deduction for the amount of credit card use'. Since the national economy runs well when consumption is active, the tax burden is reduced by considering how much I spent on consumption over the past year.
However, there is a '~ etc.' in the name, right? It applies not only to credit cards, but also to cash payments (cash receipts, check cards), simple payments (Zero Pay, etc.), and spending on public transportation/traditional markets.
✔️Credit card usage history check point
In order to receive income deduction for use of credit cards, etc., at least 25% of total wages must be spent on credit cards, debit cards, prepaid cards, cash receipts, etc.
Plan your spending strategy after October!
The limit you can receive from income deductions such as credit cards varies depending on the 'total salary' received for one year.
Of course, if the above limit is basically less than 25% of the total wage card usage, you cannot receive a deduction.
Another thing we must know is that the deduction rate differs depending on the payment method.
Deduction rate according to payment method
- Public transportation usage X 40%
- Traditional market use X 40%
- Use of books and performances X 30%
- Check card, prepaid card, cash receipt, etc. X 30%
- Credit card usage X 15%
The rate of tax benefit applied to the amount spent with a credit card is the lowest. Credit card is 15%, cash payment is 30%. If you paid the same amount with a debit card, you can apply a double deduction rate.
Check the amount of income deductions that vary depending on your spending details after October in the preview of year-end tax settlement by the National Tax Service, and plan your spending until the end of the year.
If you come up with a strategy so that you can use it to save money and tax, it will be a year-end settlement that is not regrettable, right?
Good to check in advance
✔️Check mobile phone number for cash receipt issuance
If your cell phone number has changed, check if you have not registered the new number!
Did you know that cash receipts can be accumulated even for the amount spent with Kakao Pay? Check it out right now!
Check Kakao Pay Cash Receipt Connection>
✔️ What if you are paying monthly rent? Get a receipt
If you meet all of the conditions below, you can receive a monthly rent tax credit.
- The head of a homeless householder who is a worker with a total wage of less than 70 million won for the year concerned
- Housing, residential officetel, gosiwon, etc. (exclusive area less than 85㎡)
- The address on the lease contract and the address on the copy of resident registration must be the same.
The tax rate of the tax credit differs depending on the size of the total salary.
Less than 55 million won → 10% of the monthly rent paid for one year
More than 55 million won ~ less than 70 million won → 10% of the monthly rent paid for one year
Conditions do not apply immediately.
You must submit supporting documents to the company to receive a monthly rent tax deduction.
3 required documents
- ID card
- Lease agreement
- Monthly rent transfer certificate: Issued by the relevant financial institution
📌Now, you can easily pay rent and get a certificate with Kakao Pay!
If you do not forget to pay the monthly rent and register for the reservation remittance, you can receive a monthly rent payment receipt on the expected date of delivery and submit it as data for year-end settlement. When registering for reserved remittance, select 'Rent payment' as the purpose of use.
Monthly rent reservation and payment certificate at once>
Start practicing and check it now
✔️ Adjust credit card and check card usage ratio
There are two ways to adjust the card usage rate. The key is to maximize the benefits of the card by using a credit card with a low deduction rate up to '25% of the total salary', which is the standard for receiving income deduction, and use a debit card with a high deduction rate for everything else to maximize the benefits of deduction!
📌Usage Rate Tips
If you've been using your credit card since the beginning of the year, you'll have filled up 25% of your annual salary with your credit card around August or September. From this point on, use only check cards with a relatively high income deduction rate. In this way, you can match the credit/debit card usage ratio without worrying too much, and you can also take advantage of credit card benefits.
Check the check/credit card ratio>
✔️Check if you are a dependent
If there is a family member living with you on resident registration whose annual income is less than 1 million won, you can apply for income deduction by bringing the person's credit card, etc.
Since it is a family living together according to resident registration, when you take off the documents such as a certified copy, you must enter as a family member. It does not apply to sibling relationships!