Let’s find out about the year-end settlement schedule, refund inquiry, and method for 2023.I don’t think the year-end tax adjustment will change even if I pay attention to it, and I think it’s complicated to pay attention to it.Let’s take a closer look at the contents below.
Reason for year-end tax adjustment.
The most common words that come to mind when you think of year-end tax adjustments are “Monthly Salary in January” and “Monthly Bonus in January.”It is a modifier given because at least 100,000 won to as much as 1 million won or more money comes in unexpectedly.
The year-end tax settlement, which seems to bring in “free money (or earned money)” is actually to get the money back.Some people may think, “I’ve never paid, but if you look closely at the salary statement, you can see that income and local income taxes are withdrawn every month.
Year-end tax adjustment is the process of getting back the income tax and local income tax paid every month.
For example, if Mr. A withheld 100,000 won in income tax and local income tax from his monthly salary, he would have paid a total of 1.2 million won in income tax for a year.The final tax amount that A has to pay is not 1.2 million won, but this process is for the withholding agent (company) to arbitrarily withhold a certain amount and pay it as income tax.
Here, let’s say that the final tax amount was confirmed at 500,000 won after A received various deductions for spending, such as using a credit card and spending medical expenses for a year.If so, you will receive a refund of 700,000 won, excluding 500,000 won from the withholding amount of 1.2 million won.
But why is it going through a complicated process of withholding and returning taxes in advance?If we only take away the taxes we have to pay accurately, all Korean office workers don’t have to waste energy on year-end tax adjustments.
To understand the reason easily, you can look at the operator’s case.
The business operator reports the amount of income generated from January to December excluding necessary expenses as a comprehensive income tax in May of the following year.In the case of business operators, when reporting in May next year, the final tax amount to be paid by calculating both income and necessary expenses for this year (2020 attributed) has already been calculated, so the income tax is the end.In other words, you don’t have to bother getting a tax refund.
On the other hand, office workers go through the process of withholding taxes in advance when they receive salaries.
However, the withholding income tax does not reflect the expenditure on necessary expenses for working, so the amount spent through year-end settlement is deducted.
Then, there must be another question.
Why do office workers allow a wider range of expenses such as credit card usage, transportation, medical expenses, and donations, when business operators are only allowed to spend necessary expenses for running a business?
Office workers have nothing to deal with compared to business operators, so they return some of the taxes paid by deducting the expenses they and their dependents spent living.
Year-end settlement schedule for 2023
Workers wishing to use the simplified data provision service must check (agree) the provision of data at HomeTax (SonTax) once for the first time from December 1st to January 19, 2023.The National Tax Service only provides the company with simplified data of confirmed (agreed) workers.
In addition, if the dependents agree in advance to provide simplified data by January 19 next year, simplified data of the dependents will be provided.If you have previously registered dependents, there is no need to go through separate procedures for the collective service.
The National Tax Service plans to provide simplified data of workers who have completed the confirmation (agreed) of data provision to the company sequentially from January 21 next year in the form of a PDF compressed file.After that, the company can download the simplified data from HomeTax collectively and upload it to the company system collectively to proceed with the year-end settlement.
2023 연말정산 일괄제공 서비스
2023 year-end settlement service
Inquiry on cash payment (method)
You can check the refund through the National Tax Service’s HomeTax (https://www.hometax.go.kr/)).HomeTax has opened a system that allows you to predict the year-end settlement amount in advance, and you can calculate the expected tax amount through the Year-end Settlement Preview on the HomeTex-Enquiry/Issuance Screen.
The current system is a service that allows you to calculate the estimated tax amount in advance based on the year-end settlement for 2021 by entering the estimated amount of credit card usage from January to September.
The screen is very intuitive, so you can check your dependents’ credit cards, debit cards, cash receipts, etc.In addition, annual expected income and pre-paid tax can be adjusted, so year-end settlement can be expected in reality.
In addition, dependents can be added/deleted, and measures can be taken to receive additional deductions by providing income deduction limits for various income deduction items such as pensions, insurance, and housing savings.