[Year-end Tax Adjustment Simplification Opens on the 15th] "18 Million Workers, Make Sure to Prepare This"

[Asia Economy Reporter Kwangho Lee] The year-end tax settlement for 18 million workers will begin on the 15th. To receive the '13th-month bonus' properly, individuals must carefully check the income and tax deduction documents required for the year-end tax settlement and personally gather any documents that are not automatically retrieved.

On the 9th, the National Tax Service announced that the '2019 Year-End Tax Settlement Service' will be provided through the National Tax Service Hometax website.

First, the 'Year-End Tax Settlement Simplification Service' for convenient tax settlement will be launched from 8 a.m. on the 15th.

By using the Year-End Tax Settlement Simplification Service, users can verify proof documents such as medical expenses and credit card usage submitted by receipt-issuing institutions like banks and hospitals.

However, medical expense data and other documents additionally or revisedly submitted by receipt-issuing institutions after the launch of the Year-End Tax Settlement Simplification Service will be finally provided on the 20th.

According to the revised tax law, in this year’s year-end tax settlement, workers with a total salary of 70 million KRW or less can receive a 30% income deduction on museum and art gallery admission fees paid by credit card after July 1 of last year. If the amount used exceeds the income deduction limit, the excess amount can be additionally deducted up to 1 million KRW combined with book and performance expenses.

Postpartum care center expenses are also included in the medical expense tax deduction up to 2 million KRW. However, users of postpartum care centers must submit a receipt showing their name and the amount used as proof for the tax deduction to their company.

Additionally, the threshold for high-value donations, where 30% of the donation amount is deducted from the calculated tax, has been lowered from exceeding 20 million KRW to exceeding 10 million KRW. The period for carrying forward donations that exceed the deduction limit and were not deducted in the current year has also been extended from 5 years to 10 years.

Furthermore, the deduction target for long-term housing mortgage interest repayment, which previously applied only to houses with a standard market price of 400 million KRW or less at the time of acquisition, has been raised to houses with a standard market price of 500 million KRW or less.

In addition, the non-taxable standard for night work allowances for production workers has been expanded from a monthly fixed salary of 1.9 million KRW or less to 2.1 million KRW or less. The non-taxable limit for job invention compensation has also been increased from 3 million KRW per year to 5 million KRW per year.

On the other hand, there are several items where deduction benefits have been reduced. Until now, all children under 20 years old were eligible for basic deductions, but from this year, only children aged 7 or older (including children under 7 attending school) can receive tax deductions. If there are two or fewer children aged 7 or older eligible for basic deductions, 150,000 KRW per child is deductible, and from the third child onward, 300,000 KRW per child is deductible.

If you purchased duty-free goods with a credit card at duty-free shops after February 12 of last year, this amount is excluded from credit card income deductions. Also, expenses for new car purchases and education (excluding academy fees for preschool children) are not eligible for credit card income deductions.

Meanwhile, it is advisable to avoid using the service on the 15th (launch day) and the 20th (data confirmation day), when service usage is concentrated and waiting times may be long.