Switching Cards Can Boost Your Tax Deduction: How to Prepare for Year-End Tax Settlement

[Anchor]

It's Friday, time for "Friendly Economy" with reporter Han Jiyeon. Han, today (November 6) you're going to cover tips for the year-end tax settlement.

[Reporter]

I will look into card spending.

If you have spent more than 25 percent of your total salary, it is advisable to switch to check cards and cash receipts.

For public transportation, it would be great to also secure overlapping point benefits.

Card deductions do not cover all the money spent, but rather start from the portion exceeding your total salary—roughly a quarter of your annual salary.

For an office worker with an annual salary of 50 million won, the threshold is 12.5 million won, and you can check whether you have exceeded this on Hometax's "Year-End Tax Settlement Preview" using the card amount spent up to September.

Since there is no deduction up to the threshold anyway, it is more advantageous to use credit cards with good benefits.

Once you cross the threshold, you can switch to check cards or cash receipts.

This is because the deduction rate is 15 percent for credit cards, while it doubles to 30 percent for check cards and cash receipts.

For example, keeping the spending amount the same for that office worker, just switching to pay 1.5 million won per month with a check card for the remaining two months will reduce taxes by more than 70,000 won.

If it is a check card that accumulates points without requiring previous month performance conditions, you are pocketing a bonus as well.

There are also limits on the deduction amount.

If your total salary is 70 million won or less, the basic limit is 3 million won, and starting this year, it is 3.5 million won if you have one eligible child for deduction, and up to 4 million won if you have two or more.

If your total salary exceeds 70 million won, this is slightly lower.

Once you have filled this basic limit, deductions will not increase even if you spend more, so you can return to using credit cards with good benefits.

There are places where deductions are even more rewarding.

Public transportation like buses and subways, as well as traditional markets, have a deduction rate of 40 percent. There are also cards that return up to 20 percent of transportation costs in points, allowing you to receive both deductions and points.

Moreover, since there is a separate limit here, up to an additional 3 million won can be deducted even after filling the basic limit.

However, maintenance fees, telecommunication fees, taxes, and expenses spent overseas are excluded from deductions even if paid with a card.

[Anchor]

Is there anything else to share?

[Reporter]

The deduction rate for amounts exceeding 100,000 won in hometown love donations has increased up to 44 percent.

You can receive benefits for up to 200,000 won.

Hometown love donation is a system where you donate to your hometown or a region you want to support other than where you currently live, and in return, your taxes are reduced and you receive return gifts such as local specialties or local love gift certificates.

Ninety-eight percent of donations last year were 100,000 won or less.

Because up to 100,000 won is entirely deducted from taxes, 100,000 won was considered the right answer.

However, things are different starting this year.

The deduction rate for amounts above that has jumped sharply from 16.5 percent to 44 percent.

If you donate 200,000 won, the first 100,000 won is fully returned, and 44,000 won from the 100,000 won above that—bringing a total of 144,000 won back as tax, and you can also choose return gifts worth up to 30 percent of the donation amount, which is worth 60,000 won.

Amounts exceeding 200,000 won remain at 16.5 percent like before, making up to 200,000 won the most rewarding bracket.

However, if you do not pay a single penny in tax, you would donate 100,000 won and only receive up to 30,000 won worth of return gifts, so you should check the determined tax amount on your withholding receipt from last year.

Also, only donations made until December 31 will be included in this year's deduction.

[Anchor]

The last topic is about fruit prices these days.

[Reporter]

Now is the time to buy apples, but you should wait a little longer for tangerines.

Many of you must have picked up a bag of apples around this time last year and quietly put it back down after seeing the price.

Apple prices have become a bit kinder this year.

As the planted area has increased and the harvest from the same field has grown, production is expected to increase by nearly 11 percent compared to last year, and the volume hitting the market this month will increase by nearly 14 percent.

As a result, the wholesale price at Garak Market is expected to be 43,000 won per 10kg box, more than 30 percent lower than last year.

The prices we pay are also around 21,500 won for 10 Fuji apples based on November 3, which is more than 20 percent cheaper than a year ago.

On the other hand, the situation for tangerines is a bit different.

This year, cool weather has continued since September, allowing tangerines to grow well, and with less rain, pest damage has also decreased, so production is projected to increase by nearly 6 percent.

However, the actual price we pay is around 4,100 won for 10 tangerines, which is more than 24 percent more expensive than last year.

This is because it is not yet the season when they pour out in full swing.

Shipped volumes are projected to increase by 8 percent this month and more than 5 percent in December.

The government expects prices to drop significantly entering December.

The burden of fruit prices will be somewhat lessened at the end of the year.

※