Income Tax Calculation Year: 2023. The following calculations use the 2023 income tax amounts. The basic concepts are the same, but the amounts may be adjusted annually.

Earning barely enough to cover living expenses, yet still have to pay taxes?

Income Tax Formula = Gross Income – Exemption – Standard Deduction/Itemized Deduction – Special Deduction （– Basic Living Expense Difference）＝ Net Income

The first time I saw this formula, I really didn’t know what each term meant. Every time I filed my taxes, I would just keep clicking “Next” and somehow finish filing.

I would always think to myself, “I earn so little, and the government still wants to take taxes from my earnings? What about my living expenses? What if I get sick and need to pay for medical bills? What about childcare expenses for raising my kids? What if I have family members who need support and care? There’s already not enough money, and now they want to tax me? I’ll end up in debt; what I earn isn’t enough to spend.”

But after understanding what each item in the formula represents, I realized that these scattered expenses are actually deducted before tax is levied. Tax is only calculated on the remaining amount after these deductions. Simply put, tax is only deducted from your remaining income after necessary expenses are covered.

Due to inflation, other living expenses and necessary expenditures are getting higher. Therefore, theoretically, the government should adjust the deduction amounts for these necessary expenses annually based on the situation. Since inflation leads to currency devaluation, in most cases, the tax-free deduction amounts should increase every year.

What exaxtly is deducted in the Income Tax Formula?

Income Tax Formula = 1. Gross Income – 2. Exemption – 3. Standard Deduction/Itemized Deduction – 4. Special Deduction （– 5. Basic Living Expense Difference）＝ Net Income

Let’s understand what exactly is being calculated in this income tax formula and why these amount options exist.

1. Gross Income

Target: Self + Dependent’s Income

This shouldn’t be hard to understand. It’s how much money you earned in that year (from Jan 1 to Dec 31). This represents your total income. All taxes will be based on this income, and calculated after deducting other expenses.

Income could be regular salary income, bank interest income, investment dividend income, etc.

Fees for authors, manuscripts, royalties, hourly lecture fees, etc. have income tax pre-deducted when received, so they don’t need to be withheld again when filing taxes.

Here Gross Income refers to the total of Income Total and Gross Income, but does not include the pre-collected Authors, Manuscripts, Royalties, Hourly Fees, etc..

So the total gross income would be A's 1,000,000 + B's 2,000 + C's 3,000 + D's 7,000, totaling 1,012,000.

2. Exemption

Target: Self + Dependents

The basic amount that every person can deduct, the basic living expense for each person.

If you have dependents, you can deduct exemptions based on this basic amount. So if you support 18-year-old children + 61-year-old parents + 71-year-old parents, the exemption amount for each person would be:

Then the total exemption would be Self 92,000 + 18-year-old children 92,000 + 61-year-old parents 92,000 + 71-year-old parents 138,000, creating a total of 414,000.

3. Standard Deduction / Itemized Deduction

You can only choose one of the two between Standard Deduction and Itemized Deduction. Choose the one that offers a larger deduction amount.

This deduction is based on expenses an average person would encounter in normal life, such as Donations, Insurance, Medical and Maternity, Disaster Losses, Mortgage Interest on Self-Use Housing, Rent Expenses, etc. It serves as a deduction for the expenses needed for a whole year, somewhat like a year’s worth of living expenses given to you by the government. The minimum living expense deduction per person is 120,000. If these expenses are lower than the minimum standard of 120,000, the government still calculates it as 120,000 for you, without lowering the deduction standard or giving you less for living expenses.

However, if your expenses in these government-specified categories exceed 120,000, you can use your own itemized list as the living expense deduction. But the Minimum Standard Deduction cannot be combined with Self-Itemized Deduction. It’s not like you can take the minimum 120,000 and then add your own itemized 30,000 to deduct 150,000. You can only choose one, so people usually choose the higher amount for tax deduction.

3.1 Standard Deduction

Husband and wife can file jointly. The Standard Deduction part can be combined, but the income part is also combined. So for this part, there is no difference or special benefit between Separate Filing or Joint Filing.

3.2 Itemized Deduction

Since you get the Basic Deduction even if you do nothing, usually if you want to use Itemized Deduction, it’s mostly because you had extra expenses in deductible categories that year. For example, encountering Major illness requiring large medical expenses, Property loss due to natural disasters, etc., would make it possible for itemized deductions to exceed the standard deduction.

Or because your tax bracket is too high. For example, your extra income of 3,000,000 is taxed at 40%, so you have to pay 1,200,000. You might want to donate this portion of tax to a charity of your choice, thinking that instead of paying all taxes to the government, it would be better to donate to a charity you care about. This is when you are more likely to use itemized deductions.

Itemized deduction categories include:

• Donations
• Insurance
• Medical and Maternity
• Disaster Losses
• Mortgage Interest on Self-Use Housing
• Rent Expenses

If your filing is linked to government records, these will be automatically itemized by default. If not, you need to itemize them yourself. Self-itemization requires attaching proof documents, so if there are related expenses that can be used as itemized expenses, the relevant proof documents need to be kept well. Each deduction item also has a maximum limit, so check the limit for that item to calculate which deduction method is more beneficial for you.

A. Donations

A.1 Charitable Organizations

• Donations to Education / Culture / Public Welfare / Charity organizations (groups), or Establisment / Donation / Joining public trust property.
• Government legally registered organizations (groups), non-consideration relationship (the other party provides no labor).
• Donation limit is 20% of Comprehensive Gross Income.

A.2 Athletes

• Donations through the Personal Donation Sports Account set up by the Ministry of Education.
• Donations to athletes who are spouses or relatives within the second degree cannot be deducted.
• No designated donation recipient: No amount limit.
• With designated donation recipient: Included in the charitable organization donation limit.

A.3 Government Agencies

• Donations to the government, or donations for national defense, troop cheering, monument maintenance.
• Disaster relief accounts established by the government.
• Verified recognition, no amount limit.

A.4 Private Schools

• Donations through the Private School Foundation.
• No designated donation recipient: No amount limit.
• With designated donation recipient: Donation limit is 50% of Comprehensive Gross Income.

A.5 Political Donations

• Donations to political parties, political groups, and prospective candidates.
• Donation limit is 20% of Comprehensive Gross Income, and not exceeding 200,000.
• Individual donation to the same prospective candidate maximum 100,000.

B. Insurance

B.1 Personal Insurance Premiums

• Includes life insurance, health insurance, injury insurance, annuity insurance, labor insurance, employment insurance, military, civil servant and teacher insurance, farmer insurance, student safety insurance, national pension insurance.
• Per person (calculated by insured person) annual limit 24,000.
• The insured and the proposer must be in the same filing account.

A is the elder brother and proposer, A’s mother is the insured. B is the younger brother claiming the mother as a dependent. A did not claim the dependent, so cannot deduct premiums. B claimed the dependent but did not pay the premiums, so cannot deduct either.

B.2 National Health Insurance Premiums

• Includes supplementary premiums.
• Verified recognition, no amount limit.
• Insured as a dependent of the insured person; does not need to be in the same filing account as the insured person.

A is the elder brother and proposer. A’s mother is attached to A for health insurance. B is the younger brother claiming the mother as a dependent. A did not claim the dependent, so cannot deduct premiums. B claimed the dependent, and although the mother is not attached to B for insurance, B can still deduct the premiums.

C. Medical and Maternity

Applicable to self, spouse, or dependents.

• Medical expenditures paid to public hospitals, National Health Insurance contracted hospitals and clinics, or hospitals recognized by the Ministry of Finance as having complete and correct accounting records.
• Parts already covered by insurance cannot be deducted.
• Verified recognition, no amount limit.
• Can include: Hearing aids, prosthetics, wheelchairs, etc., for disabilities; medical fees and equipment fees for dentures, false teeth, or dental correction due to dental disease.
• Cannot include: Cosmetic surgery, postpartum care, orthodontic fees for aesthetic purposes.

D. Disaster Losses

Applicable to self, spouse, or dependents.

• Suffering form Force Majeure disaster losses: Earthquake, wind disaster, fire, flood, insect disaster, etc.
• Within 30 days after the disaster, report to the local National Taxation Bureau with proof documents and obtain a disaster loss certificate, or submit definite evidence proving the loss is real.
• Parts already covered by insurance compensation or relief funds cannot be deducted.
• Verified recognition, no amount limit.

E. Mortgage Interest on Self-Use Housing

Applicable to self, spouse, or dependents.

• Interest expenditure on loans borrowed from financial institutions for purchasing self-use residential housing.
• The house is registered as owned by the taxpayer, spouse, or dependent relative.
• Household registration has been completed at that address during the tax year.
• For self-residence, no rental, not used for business or professional practice.
• Each filing household is limited to one house.
• After deducting the Special Deduction for Savings and Investment, the balance is limited to 300,000 per filing household.

F. Rent Expenses

Applicable to self, spouse, or lineal dependents.

• Rent paid for renting a house within the country.
• For self-residence, no rental, not used for business or professional practice.
• Each filing household limit is 120,000.
• If Mortgage Interest on Self-Use Housing is declared, Rent Expenses cannot be deducted again.

Usually, this item is currently (2022) something that average renters can look at but not touch.

F.1 Annual deduction limit is 120,000

This means only rent below 10,000 per month can be fully deducted. If you rent in a big city, most rent costs are higher than 10,000, so the part above 10,000 still has to be paid out of pocket and cannot be deducted.

F.2 To declare deduction, rent must be legally recognized as landlord’s income

When you can legally declare rent deduction, it means the government also knows the landlord has extra rental income. So the item you deduct is the part the landlord needs to pay extra tax on. The amount of tax depends on the landlord’s original income bracket.

If monthly rent is 20,000, annual income 240,000, calculating the tax the landlord needs to pay in different brackets:

The Extra Amount Allocated to Monthly Rent at the end represents the extra cost the landlord has to pay every month. Therefore, these amounts must be added so the landlord can have the same return as before. So if the landlord’s tax bracket is higher, the rent increase needed will be higher, which in turn causes the rental cost to increase even more. The original rent 20,000 might become 22,400 (5% tax bracket), 24,000 (12% tax bracket), or even more. But even if the rent increases, the deduction limit is still 120,000, so the tenant actually ends up paying higher rent.

And once declared, there is no looking back. The government immediately knows the landlord has rental income, and they can’t hide it in the future. So currently, very few landlords are willing to let renters legally declare tax. Tenants also won’t declare because declaring is disadvantageous to both tenant (rent increase) and landlord (paying extra tax).

But we still hope the entire rental market in Taiwan can be more perfect. This depends on future legal amendments to make the rental market healthier, so tenants don’t face steep rent hikes, and landlords who really use rent as income can be taxed effectively.

4. Special Deduction

If everyone has special circumstances, like having disability status, having children who need to go to school, etc., there can be special expenses deducted to be tax-free. So check if you meet certain conditions, then see how much your deduction amount is.

4.1 Special Deduction for Salary / Necessary Expenses

Applicable to self, spouse, or lineal dependents.

Special Deduction for Salary and Necessary Expenses can only be chosen between the two. Choose the one with the larger deduction amount.

You must have salary income to have the Special Deduction for Salary. So if you are retired or unemployed, you don’t have this special deduction.

A. Special Deduction for Salary

Maximum deduction per person is 207,000. If annual income is lower than 207,000, deduct actual income. For example, if annual income is 30,000, you can only deduct 30,000.

B. Necessary Expenses

These expenses include Occupational Clothing Expense, Training Expense, and Professional Tool Expense. The limit for each item declaration is 3% of income. So if all three items are declared to the max, it can reach 9% of income. You must attach a personal salary expense declaration form, vouchers, and relevant proof documents.

It is only worthwhile to choose this item for declaration when the total sum of each item’s declaration limit exceeds 207,000. And the income must exceed 2,300,000, and every item must be declared to the full 3% for it to be worthwhile.

Some professions like Artists, Plumbers, Influencers etc., might have a chance to use this. Equipment like microphones, recording tools, lighting, etc., related equipment have a chance to be deducted. So normally, you must collect all vouchers to use for tax filing. But if income does not exceed 2,300,000, using Special Deduction for Salary for deduction is still more cost-effective.

B - Professional Tool Expense

If income is 7,000,000, and 720,000 was spent purchasing photography equipment for work needs, since it qualifies as Professional Tool Expense, and is not exhausted within 2 years and expenditure exceeds 80,000, the depreciation expense can be amortized over 3 years equally. 720,000 divided by 3 years averages 240,000 annually.

But the declaration limit for Professional Tool Expense with income 7,000,000 is 3% of income, so the actual declareable limit is 210,000 (7,000,000 * 3%). So finally, only 210,000 can be declared.

In Case 1, the final declaration amount is 210,000, which exceeds Special Deduction for Salary 207,000, so using Necessary Expenses for declaration is more cost-effective.

In Case 2, the final declaration amount is 26,666. Declaration is only cost-effective if the total sum with other Occupational Clothing Expense and Training Expense exceeds Special Deduction for Salary 207,000. Otherwise, just use the original Special Deduction for Salary 207,000 for declaration.

In Case 2 (Case 3 in table actually), the final declaration amount is 69,000. Declaration is only cost-effective if the total sum with other Occupational Clothing Expense and Training Expense exceeds Special Deduction for Salary 207,000. Otherwise, just use the original Special Deduction for Salary 207,000 for declaration.

Because when tool expenditure qualifies as not exhausted within 2 years and expenditure exceeds 80,000, it must be amortized equally over 3 years. You cannot declare more upfront and less later; only the average method can be used. This leads to a reduction in the declareable amount. Unless other expenses can sum up to exceed Special Deduction for Salary 207,000, usually the amount deducted using Necessary Expenses declaration is very small.

4.2 Special Deduction for Disability

Applicable to self, spouse, or dependents.

Holding a Disability Manual, copy of physician’s diagnosis certificate, regardless of grade, 207,000 can be deducted per person. A Critical Illness Card cannot replace the copy of the Disability Manual.

Impact of Disability Comprehensive Income Tax Incentives on Receiving Disability Living Allowance

The condition for allowance is calculated based on “Family Income/Property”. The definition of “Family” according to Article 5 of the Social Assistance Act includes: Spouse, Lineal Blood Relatives of the First Degree, Other Lineal Blood Relatives sharing the same household or living together, and taxpayers who claim the person as a Dependent for Comprehensive Income Tax exemption.

Suppose A (Little Wang) is a person with benefits, and B (Old Wang) claims A (Little Wang) as a dependent. B (Old Wang) enjoys the Disability Deduction 207,000, but B (Old Wang) will be calculated into A (Little Wang)'s “Family Income”. So when Family Income/Property becomes higher, it might make the disabled person A (Little Wang) ineligible for living allowance, leading to a penny-wise, pound-foolish situation, so pay special attention.

4.3 Special Deduction for Preschool Children

Applicable to dependent children.

Households with children under 5 years old, can claim dependents and use the Preschool Children Deduction, maximum 120,000 per person.

Conditions where “Special Deduction for Preschool Children” CANNOT be used

1. After deducting Preschool Children Deduction + Long-Term Care Special Deduction, the annual Comprehensive Income Tax rate is 20% or higher when spouse’s salary income or various incomes are calculated separately.
2. Choosing Dividend Income to be calculated separately with 28% Single Tax Rate.
3. Basic Income exceeds 6,700,000.

4.4 Special Deduction for Educational Tuition

Applicable to dependent children.

Supporting children in colleges or universities can deduct Special Deduction for Educational Tuition, maximum 25,000 per person.

Below 25,000, deduct actual amount. If receiving government subsidy, the subsidy must be deducted, and the remaining balance declared.

Conditions where “Special Deduction for Educational Tuition” CANNOT be used

• Studying at Open University, Open Junior College, and the first 3 years of 5-year Junior College is not applicable for Special Deduction for Educational Tuition.

4.5 Special Deduction for Savings and Investment

Applicable to self, spouse, or dependents.

A household with Deposit interest within 270,000 can have Interest income deducted.

Savings and Investment Types

• Deposit Interest (Income format 5A Financial Institution)
• Savings Nature Trust Fund Earnings
• Profit income when giving up applicable tax deferral regulations or sending to centralized depository
• Stock dividends from publicly issued and listed deferred tax registered stocks acquired before Dec 31, 1998, upon transfer, gift, or distribution as estate (Income format 71M)

4.6 Special Deduction for Long-Term Care

Applicable to self, spouse, or dependents.

If hiring a caregiver or staying in a long-term care institution, you can use this deduction. Maximum 120,000 per person. Detailed regulations are below.

1. Meets the qualifications of care recipients eligible to hire foreign family caregivers stipulated in Article 2, Paragraph 1 of the “Qualifications and Review Standards for Foreigners Engaging in Jobs Specified in Article 46, Paragraph 1, Items 8 to 11 of the Employment Service Act”.
2. Assessed according to Article 8, Paragraph 2 of the Long-Term Care Services Act, with disability level 2 to 8 and using long-term care payment and payment standard services.
3. Staying in residential service institutions for 90 days or more in a full year.

Conditions where “Special Deduction for Long-Term Care” CANNOT be used

1. After deducting Preschool Children Deduction + Long-Term Care Special Deduction, the annual Comprehensive Income Tax rate is 20% or higher when spouse’s salary income or various incomes are calculated separately.
2. Choosing Dividend Income to be calculated separately with 28% Single Tax Rate.
3. Basic Income exceeds 6,700,000.

4.7 Deduction for Property Transaction Losses

Applicable to self, spouse, or dependents.

When buying/selling houses, if there is a loss amount, it can offset Property Transaction Income of the current year.

If current year Property Transaction Income cannot fully offset, it can be deducted again within the next 3 years.

Can only offset Property Transaction Income, cannot offset other types of income.

5. Basic Living Expense Difference

Applicable to self, spouse, or dependents.

Basic Living Expense is 192,000 per person. Basic Living Expense is the money the government considers necessary for one person to maintain basic life for a whole year. So spending within the Basic Living Expense is treated as Tax Exemption Amount, your life-saving money will not be taxed.

The 2. Exemption, 3. Standard Deduction/Itemized Deduction, 4. Special Deduction are treated as your Actual Expenditure Amount.

Basic Living Expense Difference = Basic Living Expense * Number of Declared Persons - Actual Expenditure Amount

So when your Actual Expenditure Amount is Less than the estimated Basic Living Expense, the calculated difference will be treated as Extra Tax-Free Deduction Amount.

But when your Actual Expenditure Amount is More than the estimated Basic Living Expense, the calculated difference is negative or zero, it is treated as No such difference available for deduction.

5.1 Basic Living Expense Difference Calculation

2. Exemption, 3. Standard Deduction/Itemized Deduction, 4. Special Deduction are Actual Expenditure Amounts, but cannot include the following amounts:

• Special Deduction for Salary
• Deduction for Property Transaction Losses

So if there are different filing statuses to calculate Basic Living Expense Difference, it would look like this:

Calculated this way, A. Single and B. Married Couple because they spend more, have no extra tax-free deduction amount.

While C. Family of Four (inc. 1 college student) has 105,000 extra tax-free deduction amount.

And D. Family of Six (inc. 1 college student, 1 under 5, 1 disabled needing LTC) has 65,000 extra tax-free deduction amount.

Calculating Net Income

Income Tax Formula = 1. Gross Income – 2. Exemption – 3. Standard Deduction/Itemized Deduction – 4. Special Deduction （– 5. Basic Living Expense Difference）＝ Net Income

After knowing where all the tax amounts come from, we can know that the tax levied is after deducting basic general daily necessities, and only the remaining part will be taxed.

So now we can calculate the Net Income subject to tax for different situations. Assume every person capable of working has an annual income of 700,000.

A. Single Net Income 266,000

1. Gross Income (700,000) – 2. Exemption (92,000) – 3. Standard Deduction (120,000) – 4. Special Deduction (15,000 + 207,000) （– 5. Basic Living Expense Difference (0)） = 266,000

B. Married Couple Net Income 532,000

1. Gross Income (1,400,000) – 2. Exemption (184,000) – 3. Standard Deduction (240,000) – 4. Special Deduction (30,000 + 414,000) （– 5. Basic Living Expense Difference (0)） = 532,000

C. Family of Four (inc. 1 college student) Net Income 218,000

1. Gross Income (1,400,000) – 2. Exemption (368,000) – 3. Standard Deduction (240,000) – 4. Special Deduction (30,000 + 25,000 + 414,000) （– 5. Basic Living Expense Difference (105,000)） = 218,000

D. Family of Six (inc. 1 college student, 1 under 5, 1 disabled needing LTC) Net Income -166,000

1. Gross Income (1,400,000) – 2. Exemption (552,000) – 3. Standard Deduction (240,000) – 4. Special Deduction (30,000 + 25,000 + 120,000 + 120,000 + 414,000) （– 5. Basic Living Expense Difference (65,000)） = -166,000

Net Income is negative, Tax Exempt.

Calculating Income Tax: Understanding the Comprehensive Income Tax Rate Brackets

Income Tax Formula = 1. Gross Income – 2. Exemption – 3. Standard Deduction/Itemized Deduction – 4. Special Deduction （– 5. Basic Living Expense Difference）＝ Net Income

After using the income tax formula, you know your additional required tax-deductible Net Income after deducting some tax-free amounts. You can use Net Income to calculate how much tax you have to pay.

But income tax is a progressive tax rate. The more Net Income you have, the higher the tax % you have to pay will be. And everyone often sees this income tax table below.

I had some questions when I saw this table before.

1. Net Income exceeds 540,000 and the tax rate jumps directly from 5% to 12%? If I earn more than 1 dollar over, do I have to pay that much more tax? Isn’t that a scam?
2. What is Progressive Difference for?

1. Progressive Tax Rate Calculation Method?

The progressive tax rate here is actually calculated separately. Amounts below 540,000 are taxed at 5%. Only the Net Income amount between 540,000 ~ 1,210,000 is taxed at 12%. There is no double taxation situation.

So suppose my current Net Income is 5,000,000. Putting it into this Comprehensive Income Tax Rate Bracket Table, you will see the tax is levied like this:

The sum of calculated amounts 540,000 + 670,000 + 1,210,000 + 2,110,000 + 470,000 is the Net Income of 5,000,000. But each amount is taxed segmentally at different tax rate brackets.

So the total tax amount will be 27,000 + 80,400 + 242,000 + 633,000 + 188,000, totaling 1,170,400 in income tax. Occupying 23.408% (1,170,400 / 5,000,000) of total Net Income, not all taxed at 40%. But this amount is still a bit painful for average office workers.

2. Then what is Progressive Difference for?

Then here comes some questions. If the progressive tax rate is calculated like this, what exactly is the Progressive Difference in the original Comprehensive Income Tax Rate Bracket Table for?

This Progressive Difference is simply to make it easier for you to calculate. You don’t need to calculate segmentally which is troublesome. It lets you directly multiply Net Income by Progressive Tax Rate, and finally deduct Progressive Difference to get the final tax to pay.

So if Net Income is 5,000,000, directly multiply by progressive tax rate 40% to get 2,000,000. Then deduct the Progressive Difference of 829,600, and you can get the tax to pay is 1,170,400 (2,000,000 - 829,600), which is the same as the progressive tax rate income tax calculated above.

So Progressive Difference is just the numerical value of the extra tax deducted that it calculates for you in advance.

Progressive Difference Calculation Method

A. Progressive Tax Rate 40%

Sum of all difference amounts 189,000 + 187,600 + 242,000 + 211,000 is 829,600, which is the Progressive Difference for Progressive Tax Rate 40%.

B. Progressive Tax Rate 30%

Sum of all difference amounts 135,000 + 120,600 + 121,000 is 376,600, which is the Progressive Difference for Progressive Tax Rate 30%.

C. Progressive Tax Rate 20%

Sum of all difference amounts 81,000 + 53,600 is 134,600, which is the Progressive Difference for Progressive Tax Rate 20%.

D. Progressive Tax Rate 12%

Sum of all difference amounts is 37,800, which is the Progressive Difference for Progressive Tax Rate 12%.

Dependents

Note, dependent’s income must also be declared together and will be included in income tax. If dependent’s income is lower than the sum of Exemption and Deduction, you can save on taxes.

Conditions for Dependents

1. Taxpayer or Spouse’s Lineal Ascendants

Don’t need to live together, don’t need same household registration, but need facts of support.

Over 60 years old:

• Can declare unconditionally.

Under 60 years old:

• Annual income (Taxable income) under NT$ 192,000.
• Carrying Disability Manual.
• Eligible for Long-Term Care Deduction, physical disability, mental disability, intellectual disability, critical illness requiring medical treatment, or unable to work due to incomplete recovery and requiring long-term treatment (must attach doctor’s certificate).
• Under guardianship declaration, not yet revoked.

Notes:

If 2 or more siblings commonly support lineal ascendants, siblings should agree to designate one of them to declare dependents. Cannot be declared repeatedly.

2. Children, Full Siblings

Under 20 years old and unmarried

• Can declare unconditionally.

Over 20 years old:

• Still in school, attaching current year tuition receipt, student ID front and back copy, certificate of enrollment or certificate of graduation copy.
• Carrying Disability Manual.
• Eligible for Long-Term Care Deduction, physical disability, mental disability, intellectual disability, critical illness requiring medical treatment, or unable to work due to incomplete recovery and requiring long-term treatment (must attach doctor’s certificate).
• Under guardianship declaration, not yet revoked.

Notes:

• Summer courses, cramped schools, elementary school teacher training classes, attending language schools do not count as “Attending School”.
• General universities, day/night division, Open University, study abroad (with formal student status), and military academies qualify as “Attending School”.

3. Taxpayer’s Other Relatives or Family Members (e.g., Uncles, Nephews, Nieces, Cousins, Grandchildren, etc.)

Under 20 years old and unmarried:

• Can declare unconditionally.

Over 20 years old:

• Still in school, attaching current year tuition receipt, student ID front and back copy, certificate of enrollment or certificate of graduation copy.
• Carrying Disability Manual.
• Eligible for Long-Term Care Deduction, physical disability, mental disability, intellectual disability, critical illness requiring medical treatment, or unable to work due to incomplete recovery and requiring long-term treatment (must attach doctor’s certificate).
• Under guardianship declaration, not yet revoked.

Notes:

• Must cohabit and live together.
• If not in same household registration, must submit Affidavit of Support.
• Summer courses, cramped schools, elementary school teacher training classes, attending language schools do not count as “Attending School”.
• General universities, day/night division, Open University, study abroad (with formal student status), and military academies qualify as “Attending School”.

Tax Saving for Dependent Relatives

Although supporting relatives can reduce exemptions and deductions, dependent relative’s income will also be merged into your taxable income.

Suppose you wish to declare supporting retired parents. However, parents’ annual stock interest, stock transaction income, bank interest income, land transaction income, etc., must all be taxed by the declarant.

Common Questions about Dependents

Q1. Support Priority

1. Lineal Blood Ascendants
2. Lineal Blood Descendants
3. Family Members
4. Siblings
5. Heads of Household
6. Spouse’s Parents
7. Son, Daughter-in-law, Son-in-law

Q2. Do dependent relatives need to live together and share the same household registration?

Q3. Can I declare my sibling’s children as dependents?

Support Conditions

• Facts of cohabitation ＋ Same household registration
• If not same household, must submit Affidavit of Support
• Must provide proof that siblings cannot support the children
• You meet priority support order (Civil Code Article 1115)

Q4. Can children studying abroad be declared as dependents?

Children over 20 still studying abroad can still be declared as dependents. Need to submit tuition payment proof, foreign school student ID, etc., as proof of schooling.

Studying abroad for study tour, or attending language school abroad, according to National Tax Bureau explanation, due to nature similar to training, cram school, without student status, does not meet declaration conditions.

Reference

• 申報減免或抵減規定-財政部臺北國稅局
• 2022 所得稅免稅額、扣除額有哪些？免稅額＋級距表統整 4 招節稅攻略 - 貸鼠先生
• 減稅囉！2022(111)年綜合所得稅申報重點總整理(扣除額、免稅額、課稅級距及累進稅率)(持續更新中~) @ 黃大偉理財研究室 :: 痞客邦 ::

Deductions

• 2022報稅試算 列舉扣除額、標準扣除額怎麼選？2022報稅級距、節稅教學！【Money101理財真心話】2022報稅懶人包系列 - YouTube

Salary

• 薪資收入隱含的成本及費用得就定額減除或必要費用減除，二擇一-財政部高雄國稅局全球資訊網
• 個人薪資收入減除必要費用適用範圍及認定辦法-全國法規資料庫
• 報稅小白／薪資收入可減3種必要費用！　特定高收入族「服裝、進修、工具可抵」　 | ETtoday財經雲 | ETtoday新聞雲

Basic Living Expense

• 110年度個人基本生活費提高至19.2萬元，多口之家省很多-財政部北區國稅局
• 基本生活費差額才可以減稅，而非基本生活所需費用總額 @ 黃大偉理財研究室 :: 痞客邦 ::
• 基本生活費調高至19.2萬元，4口家庭今年報稅省萬元！跟著試算一遍就知道
• 基本生活費用不課稅-財政部臺北國稅局

Dependents

• 2022 所得稅扶養親屬扣除額多少？節稅優缺點全盤分析 - Roo.Cash
• 2022扶養報稅免稅額 省稅攻略？！扶養條件 資料一次告訴你！【Money101理財真心話】2022報稅懶人包系列 - YouTube

Dividends

• 【2022所得稅懶人包】股票股利課稅計算二擇一 分開或合併？收入是關鍵！ - Money101
• 股利所得稅退稅資格是什麼?存股族聰明報稅，股利收入8．5%抵減稅額可運用。 | 豐雲學堂

Donations

• 捐款抵稅全攻略！最高可抵多少%？捐給誰才能抵？ - StockFeel 股感

Tax Refund

• 2022 所得稅退稅時間最快 7/31！5 種符合退稅資格、退稅方式一次看 - Roo.Cash