Bonus for 13 months, what has changed this year's year-end settlement?

[News FM Lee Ik-seon Choi Soo-young Issue & People]

□ Broadcast date and time: November 20, 2024 (Wednesday)
□ Host: Lee Ik-seon, Choi Soo-young
□ Contributor: Woo Byung-tak, team leader of Shinhan Bank (premier passfinder, tax accountant)

* The text below may differ from the actual broadcast content, so please check the broadcast for more accurate information.
◇ Profit line: Issue paid! This time gives you valuable information that makes money just by listening carefully. Hit instructors in each field will tell you how to reduce taxes, real estate, and stock trends. Today, we have Woo Byung-tak, the head of Shinhan Bank's tax accountant, who is famous for his tax savings. Please come in.

◈ Woo Jin-tak: Yes, hello.

◇ Proficiency Line: Today's financial technology topic is a tip for year-end tax settlement!

◆Choi Soo-young: But before this full-fledged question, I'll ask you because I'm curious about it first and a lot of people are interested in it. First of all, the government decided to freeze the market price reflection rate of the declared value of real estate next year, or the realization rate of the declared value, this year following last year. What does this mean?

◈ Woo Byung-tak: Yes. First of all, to tell you a little bit about the declared price, there is a price in real estate, and this price is a little difficult to determine exactly how much it is until the transaction is actually made. As a result, when there are many things to determine how much property a person has in a real estate, he or she must not grasp the market price until the transaction is made, so he or she sets a price equivalent to that market price on an annual basis. That's called the official price. So, it's not the actual market price that's traded, but based on that, a certain amount is calculated every year as the price of the property. As a result, it is common to be slightly lower than the market price. The actual market price is set from 50-60% to 70-80% at the most. The declared values may differ a little from the market price, and the reason why the declared value is important is that it is also based on taxes such as property tax and comprehensive real estate tax. Even if there is no transaction, you have to set the amount and impose a holding tax such as property tax or comprehensive real estate tax. Not only because you have to collect it, but it is also very important because this price is used when grasping the property of basic old-age pension and basic health insurance life benefits. However, it is inevitable that the declared value is lower than the market price, but there is too much difference compared to the house price that increased in 2020. In other words, they have a house that is quite expensive, but they actually pay a little lower for property taxes and things like that. This is because the quoted price doesn't immediately keep up with the market price, so this gap has been stacked over a long period of time. With this awareness of the problem, I will make this a reality over a long period of time. I will increase the market price a little faster until it reaches about 90% at that time. With this plan, the realization plan was carried out, and the problem was this, so the price of the house actually rose a lot during that period. Then, the market price rises, but if the realization rate is raised a little faster than the original, there is a problem that the holding tax and such things rise rapidly. At that time, property taxes and comprehensive real estate taxes increased by 1.5 times every year, and after a few years, they would pay nearly three times, so these things should be controlled a little when the market price is rising rapidly. So we decided to freeze it last year. So, I froze the average realization rate compared to the market price because I wanted to set it to about 69 of the declared value. If I freeze the declared value this year, the increase in the declared value should be reflected in the declared value, but I will not raise the realization rate further this year. You can think of it as this meaning.

◇ Profits line: Does that mean you're going to keep it at 69%?

◈ Woo Jin-tak: Yes, 69% is just an average number, so in reality, individual houses have 70 units, 80 units, and 50 units. So I'm going to keep this average figure at about 69 levels. That's what it means.

◆Choi Soo-young: Then is the holding tax going down a little in most cases right now? What about paying for it next year?

◈ Woo Byung-tak: One of the things you shouldn't misunderstand is depending on the actual market price. So, in the case of the Seoul metropolitan area, housing prices have risen a little in the second half of this year. In particular, in the case of Gangnam and Seocho areas, the increase was quite large. Even if the realization rate is frozen following last year, the official price will rise as much as the market price has risen, so in reality, areas where property taxes and comprehensive real estate taxes have risen are expected to rise slightly more than last year. On the contrary, in the case of provinces, house prices have fallen more than last year. In these areas, the market price has fallen, so there is a possibility that the official price will be lower than last year as the market price has fallen. So you can think of it as different from region to region, and in terms of rising regions, I think the Seoul metropolitan area will see at least 5% of the holding tax that was paid last year, and areas where the market price has risen a lot, such as Gangnam, will see a rise of more than 30% compared to last year.

◇ Lee Ik-seon: I see. Let's talk about the year-end settlement that we were supposed to talk about. It's usually called the 13th month's salary, but it's also a depressing time when someone has to cough up more taxes. So I hope we can find a way to save taxes for the rest of this year. Let's talk about this in this session. Feel free to ask questions while listening to the show. You can also ask other questions about real estate tax technology.

◆Choi Soo-young: To talk about year-end tax adjustment in earnest, the year-end tax adjustment preview service was held last week to predict the results of our year-end tax adjustment, right?

◈ Woo Byung-tak: The year-end tax adjustment preview service was opened on November 15 at the National Tax Service's Hometax.

◆Choi Soo-young: How can I use this? Do I just have to log in?

◈ Woo Jin-tak: That's right. I also need some login procedures. Basically, the year-end settlement is actually done next year by combining various things until December 31 this year. Each company will do year-end settlement next year, and you can calculate households through the preview service through the National Tax Service. You can calculate in advance whether your salary will be paid in the 13th month or whether you should throw up more money upside down. Since it's November, there are actually about 15 days left in November. There is about a month left until December. I'll tell you again later, but I'm not sure if that's right, but try this now and keep that in mind, whether you use a little more card to get a little more deduction or increase your savings a little bit.

◆Choi Soo-young: So we have to do the commonly called simulation.

◇Lee Ik-seon: In particular, I heard that tax credits for medical expenses for infants under the age of 6 and postpartum care expenses have been greatly expanded from this year. It is also said that the multi-child tax credit has increased significantly. What is the difference this year compared to last year?

◈ Woo Byung-tak: There are many kinds, right? First of all, until last year, only medical expenses were originally deducted without limits for their own medical expenses and dependents of workers aged 65 or older or with disabilities. As for medical expenses, other families are deducted, but there is a limit of 7 million won per year for medical expenses. Therefore, there was a limitation in which deductions were only deducted up to that amount only when spending more than that amount. From this year, infants under the age of 6 will be subject to all medical expenses spent on infants over the age of 65 or under the age of 6 without limit, just like themselves. In addition, only those with a total salary of 70 million won or less could now receive a deduction, so those who spend a lot of money on postpartum care can receive a tax credit for medical expenses up to 2 million won regardless of their income. On an annual basis. You can see it like this, and the multi-child tax credit was originally there. The original 300,000 won for two people was 350,000 won, followed by 450,000 won for three people to 650,000 won. Then, in the case of childbirth or adoption that year, 300,000 won for one person, 500,000 won for two people, and 700,000 won for three people, they said they would provide additional deductions, so they mainly increased the cost of giving birth to children, adopting children, cooking after giving birth, and expenses for young children under the age of 6 in all directions. If you have a lot of children, you can get more deductions from these places, so it may be a burden, but the tax law has been revised to ask you to actively consider giving birth to children.

◆Choi Soo-young: We often use credit cards the most. In fact, I heard that the deduction income deduction for using the credit card has increased a little. So if this year's credit card usage exceeds 105% of last year's, 10% of the excess amount will be deducted from the limit of 1 million won. So, I know you're deducting more, but it's a little complicated. I think I need some explanation.

◈ Woo Byung-tak: It's been relatively recent. Basically, if it is confirmed that you have used proof such as credit card or debit card cash receipt, you don't do it all by using more than a certain percentage of your total salary. So, in the case of spending appropriately compared to the salary, credit or debit card usage deductions were originally given. If you think this is not enough, isn't there going to be the amount of card each of you used last year? If you use 5% more every year, you will deduct more from the credit card deduction. So, it means that you should spend a little more than last year.

◆Choi Soo-young: Then overall, to boost consumption of our domestic economy...

◈ Woo Jin-tak: That's right. Since the domestic economy is in a slump, spending may be a little negative for raising money from an individual's perspective, but if you look at it broadly, the necessary consumption is also high, so if companies make money and companies make a lot of money, they will have room to raise their salaries. In this sense, as you mentioned earlier on boosting consumption, 10% of the amount exceeding 105% can be deducted up to 1 million won. Then, there is an amendment to raise the ratio of the amount a little higher, but I think we need to see if it passes or not.

◇ Line of profit: Does it often help save taxes if your credit card usage is already over 25% of your total salary?

◈ Woo Byung-tak: Yes, you can do it like this. As I said earlier, spending on a credit card is not subject to deduction during the year-end settlement, but only the amount exceeding 25% of your total salary is deducted from the total salary consumption. If you use your credit card for the excess amount, 15% will be deducted. The debit card is used the same, but it deducts 30%. So, if you combine all the spending, whether it's a debit card or a credit card, the total salary is, for example, 100 million won. Then 25 million won is 25%, how much did you spend over 25 million won? After calculating this, I spent 30 million won. Then I would've spent 5 million won. If you spend all of this with a credit card, you will deduct only 5 million won by 15%. But if it's a debit card, 30% is deducted. You can understand this issue like this. Originally, there was no big distinction, but there was a problem that credit delinquents were mass-produced because they could not pay off their credit card debts because they used a lot of credit cards. So what happens afterwards is that even if you consume the same amount of money with a card, all the evidence is left, so it prevents you from evading taxes. It has the same function for business operators, but if you use it as a check card rather than a credit card, the evidence is taxed equally. From the point of view of the consumer, it is not used by attracting one's credit, but by spending it within the amount of money, it has doubled the rate by using a check card rather than a credit card, so to put it simply, using it as a check card can be deducted a little more. Instead, check cards don't have many additional services like credit cards. If you use up to 25% of the discount and use it as a credit card for excess parts, you can receive additional services as additional services.

◆Choi Soo-young: You must be very interested in year-end tax adjustment. A lot of questions are coming up. "Even if I do year-end tax adjustment every year, I get confused every time I do it." In this way, I want to deduct my parents over 70 as a dependent, can't my address be different? ’ That's what he said.

◈ Woo Byung-tak: Even if the address is different, if there is a fact that you are supporting, you can be proved. And what you should be aware of is that if it exceeds 1 million won based on the annual income, it will be excluded from the deduction. So if it's 1 million won, with that kind of income? But not all those incomes are added up like this. The amount of taxable income is 1 million won, so it's a different concept than the total salary. So, for example, even if you receive about 5 million won, it's less than 1 million won based on your annual income. So when it exceeds that a little bit, for example, things like pension payments are taxed and not taxed, so even if the amount exceeds a certain level, there are cases where it is not actually 1 million won. So anyway, if it does not exceed 1 million won, it is subject to deduction. You can live separately.

◇Lee Ik-seon: Another listener said, 'I'm a soldier who served until June and was discharged from the military. Until I worked, the unit made a year-end settlement, but there was no difficulty. 1 Where and how to do year-end settlement for both tenure and retirement? 2 Do I still have to settle my pension after retirement? ’ She texted me.

◈ Woo Byung-tak: Yes, first of all, not only soldiers, but there are also cases where you take a break in the middle while moving to another company. So, there are cases where you get a job again in the middle, and there are cases where you have not yet been able to get a job until the end of the year and remain unemployed. If you said you retired in the middle of the year, you said you were discharged, so if you join another company year-round, you can add your old job to the year-end settlement when that company makes the year-end settlement next year. First of all, if you can't get a job until the end of this year and are not subject to year-end tax adjustment early next year, you can wait and report your income tax directly to the National Tax Service's HomeTex in May. So, you can just do it yourself when you report the comprehensive income tax in May of the following year, not the year-end settlement at the company. You can look at it like this without going through the year-end settlement.

◇ Profits line: Do I still need to settle my pension after retirement? Someone said,

◈ Woo Jin-tak: When you were a soldier in a situation where you received a pension after retirement, you made a settlement for your salary. In the case of military pension, it usually comes out immediately as soon as you are discharged. Then, I understand that you basically use tools such as year-end settlement for immediate results.

◆Choi Soo-young: From this year, the payment limit for comprehensive housing subscription savings has been raised from 2.4 million won per year to 3 million won per year. I think we can get more income deductions that can receive up to 40% of the payment.

◈ Woo Jin-tak: Yes, that's right. As the payment limit goes up, you can think of it as receiving more income deductions. However, this is an item that can only be received if you are a household owner with a total salary of less than 70 million won.

◆Choi Soo-young: There are conditions. So someone who is homeless and doesn't cost 70 million won?

◈ Woo Byung-tak: And it has to be the head of the household. You can only receive it under that condition, so on the contrary, for those who are not the head of the household or already have a house, you can't get a deductible even if you save. However, to give you a tip, the standard for household owners is December 31 every year. So it's November right now. For example, an independent child. Even if you are with your parents or live separately, there are cases where you are a member of the household with your parents as the head of the household. Then, at this time, you can apply separately for something called generation separation. Until December 31st, the generation will be separated from the parents, and if you become the head of the household, you may be eligible if the conditions for total salary are met. For those who don't have a home, it's designed to encourage savings, to apply for savings to buy a home. .

◇ Lee Ik-seon: The listener said, "I transfer the expenses of my parents' nursing home every month, is this possible during the groom's year-end settlement?" ’ She texted me.

◈ Woo Byung-tak: Yes, so you need to be a little higher than the basic deduction. So, from the groom's point of view, it's about the father-in-law's hospital expenses. It's possible, but you have to be listed as a person subject to the basic deduction. It's only possible if you moved your health insurance and gave it to me. Like this

◇ Profits line: Yes, insurance premiums, utility bills, college tuition, gift certificates, duty-free shop expenses are also subject to credit card deductions?

◈ Woo Byung-tak: These days, you can pay insurance premiums, utility bills, and even buy a car with a card. You can get a discount or something. You can do this, but these are excluded from the credit card deduction. Likewise, the amount of card used overseas or the amount used at duty-free shops while going overseas are also excluded from the deduction. If you think about the reason, it's clear. Since it provides benefits for credit card consumption in order to guess domestic consumption, it excludes money spent abroad or vehicles that are a little luxury.

◇ Lee Ik-seon: I see. There's a long story, so I'll tell you a story. "Hello, I'm Lee Kuk-se and I live in Sejong City." During gastric cancer surgery in 2022, I spent 12 million won on medical expenses out of 40 million won in total salary and deducted 1.62 million won in medical expenses tax credit for year-end settlement in February last year. And that year is 2023. In September, 5 million won was returned as a medical refund from the Health Insurance Corporation, which helped ease the burden on households due to medical expenses. However, in September this year, I was informed by the company that I had to pay 910,000 won in additional earned income tax, including 160,000 won in additional taxes, because I received excessive deductions for not deducting the medical refund from medical expenses. After receiving counseling through the National Tax Counseling Center, I felt that it was unfair to pay the additional tax because I could not deduct the post-refund to be returned more than six months after the year-end settlement. Please let me know if there will be any way. Teacher Tak! ’ As I read it, I thought I could understand it and passed by. Mr. Tak, you understood everything right, right?

◈ Woo Byung-tak: Yes, basically, 22 years have passed, but I hope you get better soon after cancer surgery. First of all, you need to understand the system first in terms of medical expenses, but there is a cap on your own burden. The upper limit is slightly different depending on the salary level and income level. The lower the income, the higher the medical expenses due to a serious illness or something. If you actually spend more than the upper limit of the individual's burden due to the income level, you will have to pay for the hospital first, so those who spent too much on health insurance calculating these in the next year will go through the process of returning the amount that exceeds the upper limit for their income. So in this case, what you said earlier was that you spent 12 million won and got about 5 million won back after that was a limit of 7 million won. Since you spent more that you had to pay, you received a refund of 5 million won the following year, but the problem is that the company made a year-end settlement at the beginning of the year. Since you spent 12 million won on medical expenses during the year-end settlement, as I said earlier, it was your medical expenses, so you received a refund after receiving a full deduction without a limit. But out of the 12 million won spent on medical expenses, 5 million won was returned from the Corporation, so the actual payment was reduced to 700, right? That's why I got too much refund. But it wasn't the situation you wanted. So I got a call again, because I got 5 million won back, so I got 12 million won and 7 million won more for the deduction, but other than throwing up 910,000 won, I got a call that I had to pay 160,000 won more for the additional tax I got because I was late. From the person concerned's point of view, it was last year, and the year-end settlement was originally done earlier this year, so I only received the deduction as I paid without knowing whether I would get it back or not, but the health insurance came after that and the National Tax Service took it after that, so you can't help but feel unfair. However, because of this problem, the National Tax Service also discussed with the Health Insurance Corporation at first as far as I know. Can't you decide on the refund first and let me know before you make a year-end settlement? But there will be a lot of administration, right? So, it's hard to do this at the National Health Insurance Corporation. In this situation, the Board of Audit and Inspection, an institution that interprets the National Tax Service as a higher-level agency, has this problem. So, since you are receiving more money from the main tax, you should pay more because you received it wrong, but instead, this person is not at fault with the additional tax. So, on the contrary, the National Tax Service is a company that collects taxes, but it is correct to exempt this from penalties. By requesting an interpretation of what you think, the Board of Audit and Inspection gave this opinion to the same effect. So the penalty tax has now been decided not to bite.

◇Lee Ik-seon: That's right. That's really true. The listener said, 'I'm a freelancer, so I can't get an income deduction. What should I do? ’ She texted me. A lot of freelancers will listen to you.

◈ Woo Byung-tak: Yes, freelancers usually talk about 3.3% of businesses earning income. In this case, I think I have no choice but to change my mind. So, year-end settlement is usually done only by earned income earners. Then, in the case of freelancers and other cases, don't you have those procedures? Originally, it is done in May every year, so report the income from the previous year in May of the year after the comprehensive income tax return, but this is actually the same concept as year-end settlement. Because there are still many things that business operators can use at that time to deduct. Even if you are not an earned income earner, you usually don't report in May within the deduction range. If you settle the account well in May, you can get the same effect as the year-end settlement.

◆Choi Soo-young: And I know that marriage tax credit will be introduced this year, but there is a question why it can't be applied to the year-end tax adjustment preview service.

◈ Woo Byung-tak: This is a revision to the National Assembly's tax law. As you know, the amendment to the tax law has not been passed by the National Assembly. Since the National Tax Service website is an official site, you have to finally check whether it passes or not, but the year-end tax adjustment preview is now to allow you to calculate in advance, but I'm not sure whether the law will pass or not, so it's only based on the old standard.

◆Choi Soo-young: So the legislation hasn't been legislated yet, so I mean, it has to be lush to lay down the administrative agency system.

◈ Woo Byung-tak: I think it's definitely possible. Then, even if it's not in the year-end tax adjustment preview, you can check it when you actually do it next year and take care of it.

◇ Lee Ik-seon: One more short. "I was not feeling well at work, so I decided to take a break and recharge, so I've been earning money as a part-time job since March this year. I'm planning to get a job again next year. I spent most of this year working as a part-timer, so I wonder if the part-timer is eligible for year-end tax adjustment. ’

◈ Woo Byung-tak: When you receive a part-time job's salary, you are usually a daily worker for a period of less than three months, and you are now withholding tax and paying tax. So, it's less visible. If earned income earners are treated like this, they are not subject to year-end settlement. There are some cases where the distinction is a little ambiguous, so even if you thought you were a part-time job, there are cases where the company now withholds it like an earned income person when the company handles it. So now, they also deal with the four major insurances. In this case, even if I'm working part-time, it's actually subject to year-end settlement, so it's a good idea to check with the company.

◇ Proficiency line: Today's issue has solved a question related to the year-end tax settlement. I was with Woo Byung-tak, the tax accountant of Shinhan Bank. Thank you.

◈ Woo Byung-tak: Yes, thank you.