【Tax assessment for Couples】Qualified Annuity Premiums Tax Deductions Have “Blind Spots”

Since the 2019/20 fiscal year, the government has introduced arrangements for the tax deduction of “qualified annuity premiums,” making it one of the “best use of tax deductions.” 

An annuity is different from bank deposits or savings plans. It allows the policyholder to convert funds into long-term and stable cash flows. It is a long-term insurance product designed to address the financial risks associated with longevity.

● Under what circumstances are annuities not tax-deductible?
When purchasing annuities, it is important to understand the coverage of different plans and whether they meet individual needs. 

To take advantage of tax deductions for annuities, one must understand the application conditions. In the case of joint tax assessment filing for married couples, their incomes are combined and calculated together. 

If one spouse’s income is less than their eligible tax exemption amount, joint tax assessment filing should be beneficial. 

However, if the wife has no income for the entire year and has purchased an annuity under her name, the annuity premium cannot be used for tax deduction when filing jointly. What could have been deducted becomes non-deductible!

To maximize tax benefits, it is advisable to consult a professional accountant before leveraging tax incentives to the fullest extent, whether it is through a spouse purchasing an annuity or exploring various new investment directions. 

Knowing how to earn is also about knowing how to save!

There are various tax incentives available, and it is recommended to consult a professional accountant for personalized tax planning.

Every industry has its “exclusive” business techniques. Consult with “Maxi Solution Accounting” who have over 20 years of experience to minimize unnecessary detours in your journey and expand your business.

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