Answer:

A taxpayer should file the gross consolidated income of himself/herself, his/her spouse, and his/her dependents jointly. However, a taxpayer shall choose one of the ways listed below to calculate the tax payable:

(1) To calculate the tax payable jointly.

(2)  A taxpayer may choose to calculate the tax payable either on his/her salary
or his/her spouse’s salary separately, and then declare and pay the amount of tax together. In this case, only the tax-exempt amount may be deducted from the salary income computed separately, whereas all other exemptions and deductions applicable to the person whose salary income is computed separately shall be declared in the tax return of the taxpayer. The taxpayer may not make a duplicate claim for an exemption of the person whose salary income is computed separately when computing the amount of income tax payable by him/her.

(3) A taxpayer can choose, on the other hand, to calculate tax due by separating one's categorized income (with his/her exemption, relevant special deduction for property transaction losses, for savings and investment, for disability, and for long-term care), and then declare and pay the amount of tax jointly. Special deduction for savings and investment should first be deducted from the one whose categorized income is not separated and dependents' interest income within the limitation of NT$270,000, and then the residual, if any, can be deducted from one's categorized income. As to the special deduction for property losses, such deduction is limited to the personal transactions, as well as relevant property gains. From 2018, tax payable of a taxpayer, his/her spouse, and dependents computed in the annual income tax return may be offset from the amount of tax credit, based on 8.5% of the total amount of the dividends and earnings distributed by a company, a cooperative, or other juristic person in the year 1998 or each ensuing year thereafter, with the credit ceiling set at NT$80,000 per year per income tax return. The taxpayer could opt to calculate the tax payable separately in accordance with the single tax rate of 28% on the total amount of the dividends and earnings, and such tax payable shall be included in the consolidated income tax return filed by the taxpayer and excluded from the above-mentioned calculation method and from the preceding paragraph about tax credit. Since different taxpayers have different sources of income and deductible items/amounts, they may compare the different formulas to decide which method should be applied. Taxpayers may use the E-filing system to file their tax return, and the system will automatically choose the most favorable way to compute the tax payable.