May has come to report and pay comprehensive income tax. All business income is required to report and pay global income tax. In addition to business income, rental income, other income such as lectures and royalties, and Google AdSense income through YouTube or blogs must also be reported for comprehensive income tax.
In this post, we will find out how much income to report for global income tax, along with tax-saving tips, tax rates, and reporting methods. 종합소득세 대상자
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1. Subjects of Global Income Tax Report 좋은뉴스
2. Global Income Tax Rate and Tax Base
3. Global Income Tax Savings Tip
4. How to apply for global income tax (Hometax)
2020 Reverted Global Income Tax Report/Payment Information
1. Subjects of Global Income Tax Report
Comprehensive income tax is not a big deal for office workers who do year-end tax settlement. However, if you have other income besides your salary at work, you are subject to global income tax. This is because the year-end settlement in the company is only for the monthly salary. Employees are required to file a global income tax return in the following cases:
※ If an employee is required to report global income tax
If you receive lectures or royalties
If you have income from a side job (YouTube, blog, etc.)
real estate rental income
Annual financial income exceeding KRW 20 million
If there are missing documents for year-end tax settlement
If you left midway through last year and were unable to do year-end tax settlement, you must file a global income tax return to replace the year-end tax settlement. You must report this in order to receive your tax refund.
In the case of missing documents during the year-end tax settlement, you can simply add the documents at Hometax and file your comprehensive income tax return. You can receive additional deductions through final returns. If you are filing a tax return and find an item that has been missing within the past 5 years, you can also file a claim for correction.
How to report addition/confirmation of missing documents for year-end tax settlement
※ Types of income subject to global income tax reporting
Now, let’s look at the income that is subject to the comprehensive income tax report in earnest. Income subject to comprehensive taxation includes interest/dividend income called financial income, business income, earned income, pension income, and finally other income. There is a standard amount set by the tax law for each type of income. If you exceed this standard amount, you must report/pay it by including it in your global income.
Types of global taxable income and the standard amount set by the tax law
As shown in the table above, financial income through interest or dividends must be added to global income if the combined income exceeds KRW 20 million. A business owner’s income is unconditionally comprehensive taxable. A worker’s income ends with year-end tax settlement if there is only earned income, but if other income is included, a comprehensive income tax report must be filed. Private pensions are subject to comprehensive taxation if they exceed KRW 12 million, and other income that is not included in all of these is subject to comprehensive taxation if they exceed KRW 3 million.
Other income here includes:
Taxes and dues for prizes or events
If you receive a lecture fee or royalties without an employment relationship
Borrowing fee for borrowing stock
It is not easy to report these various incomes without missing them. Fortunately, on the IRS Home Tax site, you can check all of your income at once. Click MY Home Tax in Home Tax, and check the statement submission details now.
How to check the income withheld from Hometax
– Subject to taxation of housing rental income
Housing rental income is taxable if you own 2 or more houses in the case of monthly rent, or if you own 1 or more expensive houses. In the case of Jeonse, if there are 3 or more houses, the amount in excess of KRW 300 million is calculated as deemed rent.
Housing rental income subject to tax
2. Global Income Tax Rate and Tax Base
Then, what will be the tax rate of global income tax? The global income tax rate is applied as a progressive tax from 6% to 45%. The progressive tax here means that 6% is applied up to 12 million won in the tax base, and 15% is applied between 1,200 and 4,600. To calculate this simply, simply multiply your tax base by the tax rate and subtract the progressive deduction. For example, if the tax base is 20 million won, multiply by 15% and then subtract 1.08 million won to get the global income tax amount.
Multiplying the calculated global income tax amount by 1.1 will calculate the final tax amount to be paid. This is because 10% is additionally imposed as local income tax.
global income tax rate
Ignoring the global income tax rate. This tax rate is not applied directly to the amount of profit. The tax base is obtained by subtracting necessary expenses from sales, personal deductions, and national pension insurance premiums. From here, the total amount of tax to be paid is calculated by subtracting additional tax credits and pre-existing tax. Below is a simulation calculated based on sales of 500 million, expenses of 400 million, and two children.
Global Income Tax Simulation
3. Global Income Tax Savings Tip
A comprehensive income tax strategy is very important. Tax deductions, special deductions, and expense processing should be used wisely. Here are five items that can serve as simple tips. If you are a business person, it is good to remember this well and organize the data well in advance. Even if you use a tax agent, there is a big difference between knowing the details and entrusting it without knowing it.
1. Registered tax credit
Bookkeeping tax credit is a system in which a certain amount is deducted from the calculated tax amount when a person subject to simplified bookkeeping prepares double-entry bookkeeping. Eligibility for simplified bookkeeping are those with less than KRW 150 million in sales in the previous year. This person can simply fill out a ledger such as a household account book, but if it is difficult to fill out and report in double-entry bookkeeping, it is a system that partially deducts the tax amount because you have exceeded your obligations.
If you are already required to report by bookkeeping, you can ask a tax accountant to report by double-entry bookkeeping, if possible. You can receive a tax deduction of 10% of the tax amount up to KRW 1 million.
Criteria for autumn report and record book report
2. Losses carried forward
Deficit carried forward is the cumulative storage of past losses, and when a profit occurs, the amount of the carried forward loss is deducted from the profit.
3. Depreciation (vehicle)
Business owners use a lot of vehicles on lease. This is because it can handle expenses. However, if you have already purchased the vehicle for business use, you can convert the vehicle’s depreciation value to cost.
4. Special deduction (yellow umbrella deduction)
The Yellow Umbrella Deduction is a product with income deduction benefits. It is explained in detail in the post below, so if you are interested, please refer to it.
Yellow umbrella deduction income deduction limit, summary of benefits
There is a system such as a retirement pension that provides opportunities for livelihood stability and business recovery from business closure or livelihood threats such as old age. It is the Yellow Umbrella Deduction. Individual entrepreneurs may have heard of
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5. Condolence expenses
Congratulation and condolence expenses can also be treated as expenses. Please keep a good record of this in your ledger.
Comprehensive Income Tax Savings Tips
-Housing rental income / financial income comprehensive tax reduction tax tip
Housing rental income is included in comprehensive taxation if it exceeds KRW 20 million. A flat rate of 14% applies below this. Therefore, for those with a lot of income, it is recommended that rental income be less than 20 million won per year. It is recommended to set the monthly rent to 1.6 million won or less, and to set the half-rate.
In the case of financial income, tax savings can be achieved by distributing the timing of income, distributing family members, or using tax-saving products.
Financial Income Tax Savings Tips
4. How to apply for global income tax (Hometax)
There are three ways to file your global income tax return.
Home Tax Homepage
Visit the competent tax office
Tax accountant office request
In general, if the tax amount is large, it is recommended to consult a tax accountant’s office. If you are in a situation where you can report simply, such as housing rental income, you can report it for free by using Hometax. How to report at Home Tax is explained in detail in the YouTube video below. It would be nice to see this and follow along.