Workers have received tax bills one after another, and they are inevitably depressed. They can't help but sigh if they can pay less tax!
In fact, in addition to exhausting personal and family tax exemptions, Zhong can make good use of the "three treasures of tax deductions", namely, Voluntary Health Insurance (VHIS), MPF Tax Deductible Voluntary Contributions (TVC) and Qualified Deferred Annuities (QDAP). ), the taxpayer can save up to RMB 11,560 on an individual basis, which is equivalent to receiving two more consumer coupons!
The maximum tax deduction for a single person under the Voluntary Health Insurance Scheme (VHIS) is 1,360 yuan.
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Tax deduction 1. Voluntary health insurance (VHIS)
Taxpayers can purchase approved products under the voluntary health insurance plan for themselves or their designated relatives, including the taxpayer’s spouse and children, the taxpayer’s or their spouse’s grandparents, maternal grandparents, parents, and siblings. The individual hospitalization insurance can also be reimbursed at the same time. To apply for tax deduction, the annual voluntary medical insurance premium tax deduction limit for each insured person is 8,000 yuan, and the actual deductible tax amount is related to the amount of insurance contributions.
It is worth noting that taxpayers must successfully open an account and complete the contributions before the last day of the tax year to make good use of the tax deduction.
Formula for estimated tax deduction:
Voluntary health insurance premium x tax rate = tax deduction
That is, the maximum tax deduction is 8,000 yuan x 17% = 1,360 yuan
Experts teach the way:
Taxpayers can purchase approved product insurance policies for themselves and their relatives to save more tax. For example, purchase a total of 3 approved product insurance policies for themselves and their two sons. Each policy and the annual premium paid are 8,000 yuan, which can be taxed. The amount deducted is 8,000 yuan, assuming the tax rate is 17%, that is, each policy saves 1,360 yuan, and the taxpayer saves a total of 4,080 yuan.
If taxpayers emigrate, they must inform the insurance company in Hong Kong to understand the scope of the insurance policy.
Xiao Meifeng, Chief Executive Officer of Junlong Group, pointed out that voluntary medical insurance is of an insurance nature and is mainly suitable for people who need to pay taxes and want to buy medical insurance.
"MPF Tax Deductible Voluntary Contributions" (TVC) provide tax concessions for employees who make voluntary contributions.
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Tax deduction 2. MPF tax deductible voluntary contributions (TVC)
Under the MPF tax-deductible voluntary contributions (TVC), you can voluntarily make additional contributions for tax deduction, and you can choose to withdraw in a lump sum or instalments when you retire.
Taxpayers can choose to make contributions at any time or on a regular basis. The amount of contribution is also variable. However, it should be noted that, like mandatory MPF contributions, if there are no special reasons, such as early retirement at the age of 60, leaving Hong Kong permanently, For complete incapacity, end-stage illness or death, etc., contributions must be 65 years of age or older to choose lump-sum or instalment withdrawals.
If the taxpayer chooses to terminate the plan, the amount of tax deductions obtained earlier will not be recovered, but the contributions paid will generally not be recovered until the age of 65.
Formula for estimated tax deduction:
TVC tax deduction cap x tax rate = tax deduction
That is, the maximum tax deduction is 60,000 yuan x 17% = 10,200 yuan
Experts teach the way:
Xiao Meifeng said that because the MPF tax deductible voluntary contributions are the same as the MPF fund selection, the MPF tax deductible voluntary contributions are easier to manage for people with an MPF account.
Moreover, there is no minimum contribution amount for MPF tax-deductible voluntary contributions, and the liquidity of funds is relatively large.
However, since MPF tax deductible voluntary contributions are prepared for future retirement, the contributions have to be bundled for a period of time and can be withdrawn until the age of 65. Therefore, young taxpayers need to think more when they choose to deduct taxes.
Furthermore, MPF investment is also an investment, and there are still risks in buying and selling funds.
Lei Zhihai, chief investment strategist at Sun Life Asset Management, pointed out that when choosing an investment plan, more consideration should be given to cash flow. He suggested that applicants should do their best and make decisions based on their future funding needs, not just for deductions. Taxes "lock up one's own assets and increase restrictions on withdrawals."
He continued that the MPF tax deductible voluntary contributions are a long-term investment plan. The main consideration is that the retirement time and the time to get back the contributions must match, and the investment portfolio must be determined according to the length of investment time.
He suggested that investors who have invested a long time and are younger should adopt a more aggressive attitude. For example, investing in stock funds has the highest rate of return.
For those who are older and approaching retirement, the first consideration is investment time and risk management. "Should not be extremely aggressive." It is recommended to consider mixed asset funds. The portfolio mainly includes bonds and stocks. Although the returns may be low, volatility and risks Also relatively low.
The maximum tax deduction for a "Qualified Deferred Annuity" (QDAP) policy is $10,200.
Tax deduction 3. Qualified Deferred Annuity (QDAP)
Eligible deferred annuities can help policyholders save as a stable income during retirement.
Insurance companies will increase the amount of annuity through investment, and policyholders will get a return from this.
For the current qualified deferred annuity plans of insurance companies, the internal rate of return for the 5-year premium payment plan ranges from 0.01% to 3.33%; the 10-year premium payment plan ranges from 0.24% to 2.9%, depending on It depends on the insurance company, contribution period and annuity period.
Eligible deferred annuities must comply with the guidelines issued by the China Insurance Regulatory Commission, and the relevant premiums can be tax-deducted, including a minimum payment period of 5 years, a minimum total premium of 180,000 yuan for the entire insurance policy, and the payment time of premiums depends on the terms of the contract, usually Every year, every six months, or every month.
If you leave Hong Kong non-permanently, the insured person must be 50 years old to receive the annuity in a minimum period of 10 years. The amount depends on the insurance company's plan and product features.
Formula for estimated tax deduction:
Qualifying deferred annuity tax deduction upper limit x tax rate = tax deduction amount
That is, the maximum tax deduction is 60,000 yuan x 17% = 10,200 yuan
Experts teach the way:
Eligible deferred annuities increase taxpayers’ retirement options.
Xiao Meifeng said that eligible deferred annuities are more suitable for self-employed people or those who do not have MPF, such as some civil servants who choose to use provident fund schemes.
She continued that compared with MPF tax-deductible voluntary contributions, eligible deferred annuities are 50 years old at the earliest, that is, the annuity can be retrieved earlier, and the bundled time of contributions is shorter.
However, if the insured terminates the plan halfway, he will have to be 50 years old to get his annuity back, and the amount of tax deductions obtained earlier will not be recovered.
In addition, the combined tax declaration for couples is the most economical. The special feature of eligible deferred annuities is that when the couple file their tax returns together, they can be used as joint annuity recipients, with a maximum tax deduction of RMB 60,000 per person. After the combined tax declaration, the total application amount is as high as A tax deduction of 120,000 yuan.
It is worth mentioning that the maximum tax deduction for MPF deductible voluntary contributions and eligible deferred annuities is a total of $60,000.
Based on the current highest tax rate, which is 17%, it can save up to 10,200 yuan in tax each year.
If you take into account the voluntary health insurance (VHIS), MPF tax-deductible voluntary contributions (TVC) and qualified deferred annuity (QDAP), the taxpayer can save up to 11,560 yuan in tax, which is equivalent to receiving two more consumer vouchers!
