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Income tax. Itemized deductions and exemptions

ROC taxes, overseas payment of taxes, withholding rates, general tax liability issues, and other tax-related matters
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Income tax. Itemized deductions and exemptions

Postby kadim » 12 Jan 2016, 14:39

I will be leaving Taiwan somewhere in 2016 so I have full 2015 and part of 2016 to pay taxes for. I will be referring to this document http://investintaiwan.nat.gov.tw/eng/sh ... D=56&MID=2
If anyone has experience with exemptions and/or deductions please advice

For 2015
1. I should be eligible for Personal exemption of 85k, is it correct?
2. As for deduction it looks like it would be better for me to claim itemized deductions, however I was told that everybody claims standard deduction:
2.1. For "Insurance premiums" there is a limit of 24k for everything except health insurance. So if I understand correctly I can deduct all the health insurance premium (regardless of amount) + labor insurance of up to 24k. For example (and this is only example) if total health insurance is 40k and labor insurance is 30k then I can deduct 40k (health insurance, not limited by 24k) + 24k (labor insurance, limited by 24k)= 64k deduction?
2.2. There is "Rent for housing" deduction of up to 120k. I wonder which documents should be supplied for this? I have a contract but all the payments were done through internet-banking. I think I can provide tax office with some notice from the bank.
3. There is also a "Special deduction of salaries/wages" of 128k in addition to standard or itemized deduction. Does it apply to everyone?

For 2016:
4. If I'm staying above 183 days am I eligible for full deductions and exemptions as described in 1-3 or only for the part proportionally to number of days I work in 2016?



Maybe also someone can help me to find professional tax adviser so that I don't rely on my poor understanding of single web-site?
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Re: Income tax. Itemized deductions and exemptions

Postby Abacus » 12 Jan 2016, 15:11

The tax office is really helpful and can answer your questions. You shouldn't need pro for these basic questions.

You will likely need receipts to claim the rent deduction. This could potentially be an issue since many landlords don't report rental income. The issue would obviously be the landlords but they will likely be angry about this and manufacture some reason to keep your deposit. It isn't right but prepare for a nasty situation if you go this route.

In addition to this there is an automatic deduction that you can take instead of itemizing and you should make sure that your itemized deductions are well above this amount (to make the nastiness worth it). I looked at the numbers a few years ago and decided that it wasn't enough of a benefit to battle over.
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Re: Income tax. Itemized deductions and exemptions

Postby kadim » 12 Jan 2016, 20:02

Thank you Abacus, I will talk to tax office then. But before I do it any comment on "Special deduction on salaries/wages"?
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Re: Income tax. Itemized deductions and exemptions

Postby Abacus » 12 Jan 2016, 21:46

I don't remember ever reading about that. Do you have anything other than NHI and labor deducted from your wages each month?
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Re: Income tax. Itemized deductions and exemptions

Postby kadim » 12 Jan 2016, 22:45

I must have been confused by "deduction" word, so basically "Special deduction on salaries/wages" applies to deductions from salary other than NHI and labor. I have a "Welfare fee" automatically deducted each month, so it can fall into this category
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Re: Income tax. Itemized deductions and exemptions

Postby Abacus » 12 Jan 2016, 23:17

Oops, I misread that. That number (special deduction on salaries/wages) is just added to your standard deduction if you earned that much. I think. They do all of this for you and it is really easy.

The hardest part will be getting receipts for your rent paid from your landlord. Receipts are required. http://www.pwc.tw/en/publications/asset ... k-2015.pdf Good luck with that.
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Re: Income tax. Itemized deductions and exemptions

Postby kadim » 13 Jan 2016, 09:49

Abacus wrote:That number (special deduction on salaries/wages) is just added to your standard deduction if you earned that much. I think.


Then basically everybody is eligible for personal exemption + standard deduction + special deduction on salaries/wages = ~300k so that all salaries under 300k are not taxable?
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Re: Income tax. Itemized deductions and exemptions

Postby kadim » 13 Jan 2016, 10:35

Abacus wrote:The hardest part will be getting receipts for your rent paid from your landlord. Receipts are required. http://www.pwc.tw/en/publications/asset ... k-2015.pdf Good luck with that.


great book, somehow I was not able to google it myself
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Re: Income tax. Itemized deductions and exemptions

Postby Abacus » 19 Mar 2016, 12:59

I filed my taxes yesterday and qualified for the full 303,000 in exemptions and deductions like you would expect. I also proxy filed for a friend that wasn't able to take care of it before he left last year and he didn't get the full 303,000 amount of deductions and exemptions.

Background
18% was withheld from his checks as expected
has APRC - doesn't matter
stayed 187 days last tax year - visibly saw this written down
definitely taxed at 5%

His deduction worked out to 217656 (he obviously earned more than the 303K that year). It looks like they prorated his 85,000 personal exemption and his 90,000 standard deduction for the time that he was resident and he didn't receive these full deductions/exemptions.

This works out to a 4000ish difference on the tax bill so it isn't that big of a deal but this is interesting information to know.
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Re: Income tax. Itemized deductions and exemptions

Postby shiadoa » 20 Mar 2016, 20:30

Maybe of interest to some, is the "allowance" for any living Mother, Father and possibly even Grandparents. Even if they live overseas, I was informed by the Tax office that you can get Tax allowances, if you can prove they are alive (paperwork -wise, as opposed to prodding them with a stick)
It seems that they presume that any loving son or daughter, would of course , support their family . Worth asking the question.
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