Up to 3,000,000 Won Deducted for Medical Insurance This Year, 20 Percent of Credit Card Spending Rate

This year`s final account adjustment will raise medical and credit card deductions from last year. In addition, there may be income tax deductions for pension savings and insurance as well as for long-term savings in bonds. According to the National Tax Administration`s `2001 End of the Year Account Calculation Return Information Document` credit card deductions increased from last year`s `10 percent of spending in excess of 10 percent of total wages` to `20 percent of spending in excess of 10 percent of total wages`. The deduction ceiling has also increased from `the annual 3,000,000 won and a smaller amount from 10 percent of total wages` to `annual 5,000,000 won and a smaller amount from 20 percent of total wages`.

The ceiling for medical insurance deductions rose from 2,000,000 won to 3,000,000 won, and expenses for purchasing aids for disabled persons such as wheel chairs and hearing aids have become included in medical deductions for the first time. Furthermore, deductions from insurance for personal use of aids for disabled persons will be applied beginning this year.

New deductions apply to pensions. Special service and allotted share payments from national pension, public official pension law, military personnel pension law, private school employee pension law, and postal workers pension law will have up to 50 percent in deductions. The ceiling for earned income tax deductions has been removed and there will be 5 percent deducted from total wage over 45,000,000 won.

Wager earners who have enrolled in pension savings this year will pay within the 240,000 won ceiling while those enrolled in long-term bonds will have a 5 percent deduction from the amount to be paid.

Meanwhile, the National Tax Administration will investigate cases where deductions were made unjustly through false receipts as soon as the end of the year adjustments are finished. The NTA will make an additional 10 percent deduction from these cases.

Kwang-Am Cheon iam@donga.com