Hanwha Life Insurance, '8 tips for year-end tax savings'

*This content was translated by AI.

The year-end tax settlement period is just around the corner, where you can collect your "13th month's salary." Depending on how you prepare for the rest of the year, the glass wallet of office workers can also vary.

"The key to the year-end settlement is not to rely solely on data from the National Tax Service's 'Simplified Service,'" said Jeong Won-joon, a tax accountant at Hanwha Life Financial Services. "Since there are surprisingly many 'blind spot' items that are not automatically collected in the system, such as medical expenses and education expenses, workers need a strategy to reduce the amount of tax determined by taking evidence on their own."

Hanwha Life Insurance has unveiled "eight tax savings points for year-end settlement" by organizing major deductions that are easy to miss in the simplified service.

1. Monthly Tax Credit: Direct submission of lease agreement and transfer receipt

The monthly rent tax credit is a representative item that is omitted from the simplification service. If a homeless worker with a total salary of 80 million won or less lives in a house below the size of the national housing or a standard market price of 400 million won or less and pays monthly rent, he or she can receive a tax credit of 15-17% within the limit of 10 million won per year. Since it is often not reflected in the simplification service, the receipt of the monthly rent payment or the deposit without a bankbook must be submitted to the company along with a copy of the lease contract.

2. Cost of purchasing glasses and contact lenses: Check receipt for vision correction

The cost of purchasing eyeglasses or contact lenses for vision correction is subject to tax credit for medical expenses. Since the annual limit of 500,000 won per dependent is applied, for example, if all four family members purchased glasses or contact lenses, they could be subject to a tax credit of up to 2 million won.

Recently, it is often viewed on simplified services, but if it is omitted, the optician must obtain and submit a receipt for year-end settlement stating that it is for vision correction. The rental cost of purchasing and renting security equipment for the disabled, such as hearing aids and wheelchairs, must also be issued from the seller with a receipt in the name of the user.

3. Severe patients requiring constant treatment: KRW 2 million per person 'additional deduction for disabled people'

If the dependents suffer from chronic diseases that make daily life difficult, it is necessary to check whether they are eligible for the disabled deduction. Under the tax law, people with disabilities include not only those with disabilities registered under the Welfare of Persons with Disabilities Act, but also severely ill patients who need constant treatment for cancer, dementia, and intractable diseases.

In this case, if you submit a "certificate for the disabled" issued by the hospital, you can receive an additional income deduction of 2 million won per person with disabilities.

4. Religious organizations and designated donations: Check if donations are missing

In many cases, some religious organizations or designated donations are not reflected in simplified services. In this case, the receipt issued directly by the donation organization must be submitted to the company. In particular, it is safe to have a copy of the organization's unique license to prove that it is a qualified organization.

5. Pre-school Children's Academy Expenditure: Consideration of Pre-Elementary School Expenditure

Expenses paid to academies or arts and sports facilities that pre-school children attend more than once a week on a monthly basis are subject to education expenses deduction if certain requirements are met. English academy, art academy, and taekwondo center are representative.

However, these educational expenses are often not reflected in the simplification service, so the academy issues a separate receipt for year-end settlement and submits it.

In particular, if you have a child who entered the first grade of elementary school last year, special attention is needed as there are many cases of missing out on academy expenses spent in January and February before entering the school, even though they may be subject to deduction.

6. Cost of purchasing uniforms and gym clothes for middle and high school students: Prepare receipts

The cost of purchasing uniforms and sportswear for middle and high school students may also be subject to educational expenses deduction, so make sure to check whether they are reflected in the simplification service. Additional education expenses can be deducted by submitting a receipt for year-end settlement issued by a school uniform store.

If the school ordered uniforms or sportswear as a group and parents paid the contribution, the amount may not be displayed on the simplification service. In this case, a receipt or payment confirmation must be issued and submitted through the school administration office.

7. Educational expenses for children studying abroad: Direct proof, such as proof of payment of tuition

The tuition fees of children studying abroad are not inquired in the simplification service. However, even if it is located abroad, educational expenses spent on educational institutions equivalent to schools under the Early Childhood Education Act, Elementary and Secondary Education Act, and Higher Education Act in Korea may be subject to deduction.

To do this, documents proving the qualification to study abroad and a certificate of payment for education expenses must be submitted, and the amount must be converted into KRW and reported. In the case of remittance in Korea, the foreign exchange sale rate to the customer at the date of remittance, and in the case of direct payment from abroad, the base exchange rate or financial exchange rate at the date of payment should be applied and converted into won. The exchange rate can be found on the Seoul Foreign Exchange Brokerage website (http://www.smbs.biz ).

8. Income Tax Reduction for Small and Medium Businesses: Up to KRW 2 million per year is applied

Since income tax reductions for small and medium-sized employees are not automatically confirmed by the simplification service, workers must check whether they are eligible and apply to the company.

At the time of signing the labor contract, 70% of income tax (90% for young people) can be reduced for three years (five years for young people) from the date of employment if young people aged 15 to 34, 60 or older, disabled people, and career-interrupted workers are employed in small and medium-sized enterprises (including non-profit companies) that meet certain requirements. This reduction applies within the limit of up to 2 million won per year.

"Simplified service data are usually released around January 15, but in some cases, if the receipt issuing agency submits the data late, it will not be reflected until after January 20," said Jeong Won-joon, a tax accountant at Hanwha Life Financial Services. "So, it is advantageous to inquire once more before the deadline for submitting the company's documents to see if there are any changes and to submit the latest data."

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*This content was translated by AI.