Online, people raise gripes on tax code

“Why is the tuition for private music and art schools for kindergarten students tax-deductible, while tuition for taekwondo and swimming classes are not?” The question was raised by a taxpayer on the Web site of the national Tax Service. As the due date for the submission of documents to support the year-end tax return filing approaches, the agency’s online bulletin boards are being bombarded by taxpayers complaining of parts of the tax code they think are unreasonable. Some education fees, medical expenses and donations are allowable tax deductions but others are not. Receipts downloaded from the Internet are acceptable if they were issued by banks, but not receipts issued by credit card companies. Taxes are not levied on income used to pay for pre-elementary kindergarten education of up to 1.5 million won ($1,250) a year. The deduction applies also to private lessons at recognized private educational institutes if the child attends classes at least three hours a day, five days a week. In practice, though, this means that education expenses at institutes teaching music, art, dance, oratory and computers are deductible; those at taekwondo and swimming institutes are not. Those sports-related institutes fall under the purview of a law on physical education and are not considered educational institutes for purposes of the tax law. Expenses for private elementary school students are not tax-deductible, a provision that had also drawn a barrage of criticism. Teeth cleaning, laser vision correction procedures and the cost of glasses and contact lenses are deductible on tax returns, but the medical costs for the treatment of elderly parents suffering from dementia or the aftermath of a stroke are not deductible. Other quirks in the law also seem arbitrary. A taxpayer and the family members that he or she supports can be grouped together for purposes of medical expense tax deductions, but donations to religious organizations or churches, which are often made in the name of the family, are not fully deductible. Only the part of the donation attributed to the wage earner can be deducted from his tax return. Receipts for transactions made at banks or insurance firms are acceptable if they are submitted in the form of printouts from information posted on the Internet. But credit card expenses documented and printed from online sources are not accepted. But there is some good news for taxpayers. Several deductions are being expanded. The cap on deductions for automobile, life and health insurance payments has increased from 700,000 won to 1 million won. Medical expenses, which are deductible only if they exceed 3 percent of a wage earner’s income, have until now been limited to 3 million won. That limit is being raised to 5 million won in the upcoming filing season. by Hong Byeong-gee