Approaching ₩20M Financial Income, 3 Steps to Reduce Tax by Diversifying?

If financial income is near ₩20,000,000 annually, a checkup is necessary.

Avoiding or reducing aggregated financial income tax hinges on timing dividend and interest receipts and splitting accounts.

Individual investor:

"Will it be a big problem if my dividends exceed ₩20,000,000?"

Yes, annual aggregation can push you past the tax threshold, so preparation is essential though panic is not required.

So what to do first? Three steps.

Step 1: Adjust the year-by-year timeline / Step 2: Diversify accounts and products / Step 3: Review loss offsets and deductions

Doing the first step upfront makes the rest easier.

Financial income means interest on deposits, bond interest, dividends, and other income from financial assets.

Why does splitting by year matter?

Dividends and interest are aggregated by calendar year based on the payment date.

The same total can result in different taxable years if you shift payment dates.

This is legal timing management, not illegal manipulation.

How to diversify accounts and products?

Taxation is assessed per individual, so the strategy should focus on your own accounts rather than moving funds to family accounts.

• Dividend ETFs and stock dividends often have fixed payment months.

• For deposits and bonds, choose products with adjustable maturities or interest payment cycles.

Consider routing some income into pension-type accounts like 연금저축 and IRP, which have tax benefits.

Using 연금저축 and IRP converts some income into pension form, delaying the tax timing through their tax incentives.

What role do losses and carryforward deductions play?

Gains and losses from stocks are generally eligible for netting rules, which can offset part of the gains.

However, the rules and scope are complex and require verification.

Practical checklist, check these items

• Verify receipt dates and mark dividend and interest payment dates on your calendar.

• Confirm account structures and how much can be moved into pension accounts.

• Simulate the expected annual total of financial income.

So where do you start?

→ 1. Identify this year’s expected total financial income in one line.

→ 2. Make a table of dividend and interest payment months and mark items that can shift years.

→ 3. Ask your broker about allowable amounts and procedures to transfer into 연금저축 and IRP.

This is for reference only.

PickStock 💡

※ This article is for information only and is not investment advice.

※ Investment decisions and responsibility lie with the investor.

※ Figures are as of the time of writing and may change; check up-to-date rules with the National Tax Service, brokers, or tax advisors.