Year-end taxes: new benefits, stricter dependent rules

[Anchor]

The simplified year-end tax settlement service, often called the "13th month's salary," will begin on Jan. 15.

This year’s key themes for tax settlement are "low birthrate" and "rent."

Newlyweds can claim a 500,000 KRW tax credit.

They can only receive it once, regardless of whether it’s their first or second marriage.

Benefits for postpartum care have also been expanded.

Workers with a total salary exceeding 70 million won will also be eligible for benefits starting this year.

If you have two or more children aged 8 to 20, the tax deduction will increase by 50,000 won for each child.

The monthly rent tax deduction will also be expanded.

If your total salary is 80 million won or less, the government will refund up to 1.7 million won from your annual monthly rent as a tax deduction.

However, there are also some points to watch out for.

The process for claiming tax deductions for dependents has become stricter.

Reporter Hwang Hyun-kyu has summarized what has changed.

[Report]

A single office worker.

An office worker with a large family.

If the salaries are the same, the single-person household pays more income tax.

This is because a minimum of 1.5 million won is deducted from income for each dependent family member.

This is called 'personal deduction', but there are conditions.

Only dependents with an annual income of 1 million won or less are eligible.

This standard was established in 1995, so those with experience in year-end tax settlement will be familiar with it.

The problem is that it is difficult to know the exact income of dependent family members.

For example, children often do not know the income of parents who live separately.

The National Tax Service has decided to provide a list of dependents whose annual income exceeds 1 million won in the year-end tax settlement simplification service.

If they do not qualify, they are advised not to apply for personal deductions on their own.

The intention is good, but there are limitations.

It will only provide income data for the first half of 2024.

This is because real-time tracking of income for the second half of the year is not possible.

Ultimately, it remains difficult to determine whether one qualifies for deductions due to the ongoing challenge of assessing total annual income.

There is an even bigger hurdle.

There is a significant difference between the 'annual income' that serves as the basis for personal deductions and 'actual income.'

Earned income is calculated as 5 million won annually, public pensions like the National Pension are approximately 5.16 million won, and financial income is 20 million won, all of which are converted to an annual income of 1 million won.

[Park Young-min/Seoul Gangseo-gu: "Children have to check one by one how much pension their parents have, how much assets they have, and how much stocks they have, so it’s inconvenient."]

About 40,000 people are caught by the National Tax Service each year for improper deductions.

To avoid penalties, individuals will still need to navigate the complex calculations themselves.

This is KBS News, Hwang Hyun-kyu.