Individual income tax is the general term of legal norms that adjust the social relations between tax authorities and natural persons (residents and non residents) in the collection and management of individual income tax. The reform of individual income tax is related to the interests of each of us. On December 22, 2018, the State Council issued the Interim Measures for special additional deduction of individual income tax. What does the special additional deduction of individual income tax mean? How to deduct it? This must be an issue of great concern to everyone. The small editor of this article will explain it in detail.
1、 What does the special additional deduction of individual income tax mean?
The full name of the special additional deduction of individual income tax is called the special additional deduction of individual income tax), which refers to the six special additional deductions stipulated in the individual income tax law, such as children's education, continuing education, serious illness medical treatment, housing loan interest, housing rent and supporting the elderly. It is one of the supporting measures to implement the newly revised individual income tax law.
On December 22, 2018, the State Council issued the notice on printing and distributing the Interim Measures for special additional deduction of individual income tax, which will come into force as of January 1, 2019.
2、 How to deduct the special additional deduction of individual income tax?
1. Special additional deduction of individual income tax for children's education
Children go to school and parents reduce their burden. According to the interim measures, the relevant expenses of taxpayers' children receiving full-time academic education shall be deducted according to the standard quota of 1000 yuan per child per month.
Parents can choose to deduct 100% of the deduction standard by one party or 50% of the deduction standard by both parties. The specific deduction method cannot be changed within a tax year.
Liu Yi, a professor at the school of economics of Peking University, noted that compared with the previously released draft for comments, the Interim Measures added the item of 'technician education' under the column of high school education specifically covered by academic education.
2. Special additional deduction of individual income tax for serious illness medical treatment
According to the interim measures, in a tax year, the medical expenses related to basic medical insurance, after deducting the medical insurance reimbursement, the accumulated personal burden of more than 15000 yuan, shall be deducted according to the facts within the limit of 80000 yuan by the taxpayer when handling the annual final settlement. In the previous draft for comments, the limit was 60000 yuan.
Compared with the exposure draft, the most concerned is the change of deduction method. The medical expenses incurred by a taxpayer may be deducted by himself or his spouse; The medical expenses incurred by minor children may be deducted by one of their parents.
"This is very warm and necessary." Liu Yi said that if taxpayers get seriously ill, their income level will usually decline, and they may not meet the tax deduction standard and enjoy the relevant deduction policies. Allowing the spouse to deduct can effectively reduce the burden of the taxpayer's family.
3. The first house loan is deducted from the special additional income tax
The mortgage is heavy, and the individual income tax will be reduced. According to the interim measures, the interest expense of the first set of housing loan incurred when I or my spouse uses the individual housing loan of commercial bank or housing provident fund alone or jointly to buy a house in China for me or his spouse shall be deducted according to the standard quota of 1000 yuan per month in the year in which the loan interest actually occurs, and the deduction period can be up to 20 years.
It is noteworthy that the Interim Measures clarify the definition of 'first set of housing loan', that is, the housing loan that enjoys the interest rate of the first set of housing loan when purchasing a house. As agreed by the husband and wife, one of them may choose to deduct, and the specific deduction method shall remain unchanged within a tax year.
4. Housing rent deducted from special additional income tax
The mortgage can be paid, and the rent can also be paid. According to the interim measures, the housing rent expenses incurred by taxpayers who do not have their own houses in the main working cities can be deducted in accordance with the following standards:
--The deduction standard for municipalities directly under the central government, provincial capital cities, cities specifically designated in the state plan and other cities determined by the State Council is 1500 yuan per month;
- except for cities listed in the first list, the city with a registered residence population of over 1 million is city's standard of 1100 yuan per month.
- the city registered residence population of less than 1 million of the city, the standard is 800 yuan per month.
Careful people will find that the deduction standard in big cities has been raised compared with the draft for comments. Zhang Bin said that the Interim Measures absorbed the suggestions on the low rent deduction standard during the consultation, and appropriately increased the rent deduction standards of the first and second tier cities, in which the deduction standard of the first tier cities was increased from 1200 yuan to 1500 yuan per month and that of the second tier cities from 1000 yuan to 1100 yuan per month.
For married people, the final deduction of rent depends on their 'other half'. According to the interim measures, if the spouse has his own house in the taxpayer's main working city, it shall be deemed that the taxpayer has his own house in the taxpayer's main working city. If both husband and wife mainly work in the same city, only one party can deduct the housing rent.
In addition, taxpayers and their spouses cannot enjoy the special additional deduction of housing loan interest and housing rent respectively in a tax year.
5. Special additional deduction of individual income tax to support the elderly
According to the interim measures, the maintenance expenses of taxpayers supporting one or more dependants can be deducted according to the standard quota of 2000 yuan per month; Non only children can share the deduction amount of 2000 yuan per month with their brothers and sisters, and the amount shared by each person cannot exceed 1000 yuan per month.
6. Individual income tax special additional deduction continuing education
According to the provisions of the interim measures, the expenses of taxpayers receiving academic (degree) continuing education in China shall be deducted according to the quota of 400 yuan per month during the period of academic (degree) continuing education. If an individual receives continuing education with a bachelor's degree or below and meets the specified conditions, he may choose to deduct it from his parents or himself.
However, tax cuts are not 'indefinite'. The Measures stipulate that the deduction period for continuing education with the same academic degree (degree) shall not exceed 48 months. Experts believe that this can not only meet most of the needs of continuing education, but also avoid being exploited to a certain extent.