The income tax withheld from monthly salaries is reconciled during the year-end settlement, allowing taxpayers to receive refunds for overpayments or make additional payments for underpayments. Experts advise that managing tax deduction items now, rather than waiting until the year-end settlement season, can significantly increase refund amounts.
The first item to check is the usage ratio of credit and debit cards. Only the amount spent that exceeds a certain percentage of total salary is eligible for deductions, and generally, the deduction rates for debit cards and cash receipts are higher than those for credit cards. This is why consumers adjust their spending plans as the year-end approaches.
Contributions to retirement savings and Individual Retirement Pension (IRP) accounts are also key tax-saving tools. Tax credits are available for contributions up to a certain limit, making these popular options among employees. Planning contributions in advance rather than making a lump sum payment at year-end can help reduce financial burdens.
Medical expenses, education costs, and donations are also eligible for deductions. Expenses incurred for dependents can also qualify for deductions, so it is advisable to check related receipts and documentation in advance.
For dual-income couples, it is important to evaluate who should claim the dependent deduction. Since the same family cannot be claimed for deductions by both partners, considering income levels and deduction items can lead to differences in refund amounts.
Housing-related deductions are often overlooked. Rent tax credits for non-homeowners and deductions for contributions to comprehensive housing subscription savings can provide tax benefits if eligibility criteria are met.
Experts emphasize that the year-end settlement process is not just about submitting documents in January or February; it is influenced by year-round spending, financial product subscriptions, and management of deduction items. The more prepared individuals are, the higher the likelihood of increasing their refund amounts.
* This article has been translated by AI.
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