Navigating Comprehensive Income Tax for Office Workers with Side Jobs: What You Need to Know

economy

Entered2024.05.04 18:03 Modified2024.05.05 00:54

An office worker with a side job earned more than 3 million
If you do not report comprehensive income tax by the 31st of this month, you will be liable for additional tax.

Photo = Getty Image Bank Even if you are an office worker who completed the year-end tax settlement at the beginning of this year, if your other income earned through a side job last year exceeded 3 million won (excluding expenses necessary), you must report comprehensive income tax by the 31st of this year. People whose total financial income (interest and dividend income) exceeds 20 million won per year or whose private pension income exceeds 15 million won per year are also subject to comprehensive income tax reporting and payment. Anyone with business or rental income must report whatever the amount.

○ If you do not report on time, you will be subject to a 20% penalty.

In the drama ‘The Glory’, which gained immense popularity early last year, Lee Sa told Choi Hye-jeong, who comes from an ordinary family, “There is a world where you pay comprehensive income tax that you don’t know about it.” The general consumption tax is an indirect expression of the fact that it is a tax for the upper class. However, comprehensive consumption tax is not just a tax for the upper class, but is a tax paid by various types of people, including self-employed people, office workers with side jobs, real estate rental business operators, freelancers, and pensioners. Comprehensive income tax is levied on business, interest, dividend, earned income, and pension income accrued to individuals through economic activities during the year. For office workers, if they only have earned income, the process ends with a year-end tax settlement, but if they have other income over a certain amount, they must report comprehensive income Photo = Getty Image Bank If you is an office worker with a side job, your other income is more than 3 million won per year, excluding necessary expenses You have to check whether it was done or not. Even if you have made a year-end tax settlement, you must report comprehensive income tax if your other income exceeds 3 million won. 3 million earned is the amount of money earned minus expenses. The standard for distinguishing business income from other income is ‘is the income sustainable’.

If it is continuous, it is classified as business income, and if it is one-time, it is classified as other income. For example, if you are active as a creator on an SNS such as YouTube and regularly generate advertising or sponsorship income, you must register as a business and report it as business income. Lecture fees, consulting fees, and royalties received from writing books are representative examples of other income. The tax rate is set at 6% (under 14 million won) to 45% (over 1 billion won) depending on the tax base range. The government has raised the range to which the minimum tax rate of 6% is applied below 14 million earned since last year. Previously, it was less than 12 million won. The tax base is calculated by subtracting the amount of income deduction from the amount of comprehensive income. If you don’t report your comprehensive income tax on time, you will have to pay additional taxes. Non-reporting generally due to error, etc. is subject to an additional tax of 20% of the amount of tax paid without reporting. In the event of under-reporting, an additional tax of 10% of the under-reported tax amount must be charged.

○ “Guidance by calculating the amount of tax in advance”

According to the National Tax Service, comprehensive consumption tax can be reported using the National Tax Service’s Hometax or Sontax (app) and an ARS phone call without having to visit the tax office. This year, a ‘Fill All’ notice which calculates the tax amount in advance will be provided to 7 million people.

Specifically, full refund notices will be sent to 4.6 million personal service income earners (1.035 trillion expected refund amount earned). Small-scale self-employed people, office workers with income other than earned income, home rental income earners, pensioners, and personal service income earners (delivery riders, designated drivers, academy instructors, carers, etc.) are all eligible guidance. Taxpayers who receive a notice to fill in all the information can easily complete the form by calling ARS or Sontax without having to visit the tax office. The National Tax Service will operate a dedicated ‘Income Tax Reporting’ screen in Sontax during May to help taxpayers file returns conveniently. To provide hassle-free telephone counseling services to taxpayers, 24-hour artificial intelligence (AI) counseling will also be implemented on a pilot basis starting from this comprehensive income tax return.

Comprehensive income tax payers must also report and pay personal local income tax to the local government. After reporting comprehensive income tax via Hometax or Sontax, you can automatically link it to Witax to report personal local income tax immediately. Taxpayers who have received a filling notice will all be recognized as having filed a tax return if they pay the local income tax amount to the virtual local income tax account specified in the notice.

Reporter Kang Kyung-min kkm1026@hankyung.com

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