A lot of misunderstandings and mysteries surround this deduction. I'm going to attempt to explain it. =)
First of all, go to the bank or contact your credit card company (via telephone or web) and get a 2007 total spending statement. Now let's get it started....
1. Let's say I spent 3,500,000 won in total on my Samsung card in 2007. (I spent 3,490,000 won on beer and 10,000 won for the subway.)
2. Multiply your total (gross) 2007 salary by 15%
For example, if my total gross income was 10,000,000 won.
10,000,000 x .15 = 1,500,000
3. 3,500,000 (total credit card) - 1,500,000 (Salary x .15) = 2,000,000 won.
4. 2,000,000 won x .15 = 300,000 won (Voila!)
5. 10,000,000 - 300,000 = 9,700,000 won (This is your new taxable income.)
So, instead of paying taxes on 10,000,000 won you would pay taxes on 9,700,000 won.
Easy. Right? =) (I love tax deductions. Don't you have a warm feeling inside now?)
*The NTS uses this formula: (Credit Card Transaction - Total wage and salary x .15 x .15)
www.nts.go.kr
1 comment:
You are great to know credit card tax deduction!! Many people don't know about this well because it's a little complicated and annoying them. The formula changes almost every year, so I'm also a little confused. Using credit card more is the way to make money. Nonsense!
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