What does special deduction mean? Why should I fill it out?

Special additional deduction means that when calculating the taxable amount of comprehensive income, in addition to the 5000 threshold and special additional deductions such as "three insurances and one gold", additional deductions are allowed, such as children's education, continuing education, serious illness medical treatment, housing loan interest or housing rent, and supporting the elderly.

The special deduction of expenses is an important part of this tax reform, which reduces the personal tax burden, helps the tax to better reflect the burden of different families and better play the role of regulating income distribution.

The establishment of special additional deduction is actually based on "basic expense deduction standard of 5,000 yuan/month+five insurance and one gold tax allowance+other deductions determined according to law", and then the tax allowance is increased for individual residents. In other words, every month's income is deducted from social security, then these special deductions are deducted, and then the rest is taxed.

The calculation method of monthly income equivalent to individual tax is as follows:

Monthly income -5000 yuan threshold-three insurances and one gold special deduction, etc. -Special additional deduction-Other deductions determined according to law = taxable income.

For example, a person's monthly salary is 10000 yuan, and at the same time meets the criteria of three special additional deductions, then his tax reduction amount is:

10000-5000 (tax threshold)-1300 (three insurances and one gold)-1000 (children's education)-1200 (rent) -2000 (pension) =-500.

In other words, the monthly income 10000 yuan, taxpayers will no longer need to pay personal income tax.

After joining the special deduction project, it can be said that it is the gospel of low-and middle-income people. Everyone will encounter at least one or more special additional deductions, so the money saved in a whole year is very considerable. Of course, the special additional deduction is still being adjusted, and the standard of special additional deduction for individual tax may change.

Legal basis:

Notice on Printing and Distributing the Interim Measures for Special Additional Deduction of Individual Income Tax Article 14 If a taxpayer or his spouse uses a personal housing loan from a commercial bank or housing accumulation fund to buy a house for himself or his spouse in China, the interest expenses incurred from the first housing loan shall be deducted according to the standard quota of 1 000 yuan per month in the year when the loan interest actually occurs, and the maximum deduction period shall not exceed 240 months. Taxpayers can only enjoy a first home loan interest deduction.