Pension Savings and IRPs, Stock Investments, Car Taxes, Estate Taxes, and Property Taxes

Pension Savings and Individual Retirement Pensions (IRPs)

Pension savings and individual retirement pensions (IRPs) are a popular way to save for long-term wealth building and retirement, as well as tax benefits. 

You can deduct up to $4 million in pension savings each year, which is tax deductible. This can save you a lot of money in the long run, so it's a good idea to take advantage of it. 
Individual Retirement Plans (IRPs) are similarly tax deductible up to a maximum of KRW 7 million per year, and you can receive up to 90% of the principal tax-free when you reach maturity, so it's a good idea to include them in your long-term wealth management strategy. 

 

Stock investments and taxes

Stock investments are also closely related to taxes. You will have to pay a certain percentage of tax on the profits you make from investing in stocks, known as securities capital gains. However, the taxation methods and rates for this are quite complicated and should be checked before investing. 

Generally speaking, if you hold a stock for less than a year and sell it, it's categorized as a short-term capital gain, which is subject to income tax. On the other hand, if you hold it for more than a year and then sell it, it's classified as a long-term capital gain, and you'll be subject to comprehensive income tax on that gain. 

Dividends are also subject to withholding taxes, so you'll need to take that into account as well. However, dividend withholding tax rates are different for non-residents, so be sure to check your country's tax treaties when making international transactions. 

Tax savings for the self-employed and freelancers

If you're self-employed or a freelancer, you can deduct necessary expenses, such as business equipment, from your income by providing them with receipts, so receipt management is very important. 

If you employ people, their expenses can also be recognized as business expenses, so you need to accurately calculate and report wages and major insurance premiums. In addition to direct expenses such as internet and phone bills and office rent, you can deduct additional expenses by including indirect expenses. 

If you're a freelancer, you can report your expenses similarly to a self-employed person because you're running your own business. However, freelancers often have irregular income or no tax withholding, so you'll need to be careful about calculating and paying your taxes. 

 

Car taxes and ways to save

If you own a car, then you need to pay car taxes every year. Car taxes are determined by the type of car, its displacement, and how long you've owned it, and are generally higher for more expensive cars. 
However, in some cases, you may be eligible for tax breaks. For example, if you own a low-emission vehicle or an electric vehicle, or if you are a person with a disability or a national hero. There are many other tax breaks available at different times of the year, so it's worth checking periodically. 

Car insurance premiums are another way to reduce taxes. In principle, insurance premiums are deductible from business income. Therefore, if you are a sole proprietor, the insurance premium for a vehicle you use to run your business can be recognized as an expense. 

Real estate and property taxes

General real estate tax and property tax are levied on people who own real estate, and the amount depends on several factors, including the value, type, and location of the property. 

Real estate taxes are calculated on June 1 of each year and include all real property, including land and buildings, not just homes. Property taxes, on the other hand, are only assessed on non-residential property, including land and buildings.
The amount of property tax and combined real estate tax can be significant, so it's important to have a tax savings plan in place. For example, if you are a multi-family homeowner, you can sell your non-residential units to become a single-family homeowner or dispose of more land or non-residential buildings than you need. In addition, real estate rental businesses can reduce their tax burden by properly declaring necessary expenses. 

Summary

We've covered a wide range of topics, from deductions to saving through real estate and stocks to strategies for the self-employed and freelancers, and we hope you've gained some practical tips and tricks that you can use in your situation.