Raising the limit for dependen tax deductions...
It's going to be a bit chilly today, but at least it isn't going to rain. We can expect highs of between 15C and 16C for the next three days, but only today will be 'nice'. Rain will roll in at some point tomorrow and continue through Sunday (during my run...I won't give up, but it'll be a very slow time. I'm not breaking my leg just for a race.) It should clear up on Monday, but it'll be a bit cooler with a high of around 12C.
There's some good news for families who want to earn a bit more money. The government is set to raise the yearly income limit for the spousal tax deduction system for taxpayers with working spouses, from up to 1.03 million yen to 1.5 million yen, it has been learned.
The decision, made on Nov. 24 and set to be incorporated in fiscal 2017, is aimed at encouraging women to take larger roles in the workforce. The new plan will alleviate tax burdens on households as they will be eligible for spousal tax deductions.
Under the current spousal tax deduction system, Y380,000 is deducted from the taxable income of the primary breadwinner of each household when their spouse makes no more than Y1.03 annually. This system has been accused of prompting more housewives, for example, to make sure their annual part-time income does not top Y1.03 million.
In an effort to promote more women to participate in the workforce, the government and ruling parties have been looking into allowing more people to be eligible for spousal tax deductions by raising the annual income limit to either Y1.3 million or Y1.5 million.
According to an estimate by the Finance Ministry, if the yearly income threshold was raised to Y1.5 million, about 3.4 million households would enjoy tax cuts, while raising the limit to Y1.3 million would only leave around 2.6 million households with less tax to pay.
In a bid to prevent tax revenue falls under the new system, households whose main breadwinner's annual income tops Y11.2 million will not be eligible for spousal tax deductions. Ahh...why are people who are making over Y11 million a year getting a tax deduction anyway? Do they need it? Ha ha!
Overall, I think it's a great idea. It can't hurt, right?
Have a great day!