Tax deduction options for foreigners living in Japan?

[TAG_Member]

There is also a little known trick : if you get a new wooden house (like a mountain chalet ) built you can deduct depreciation on it. And it can be anywhere (not just in Japan). I know a foreigner who pays basically no tax thanks to this.

Anyone else have more information on this?

 

[Frenchy]

Anyone else have more information on this?

You can google and find various articles but the one I found most helpful is the link below as they mention the loophole on foreign houses . I was wrong by the way, it's apparently better to buy an OLD wooden house , but I'm no expert , didn't do this myself, and of course not affiliated in any way with the people who wrote this. But obviously if you buy the home in your home country or anywhere where you want to retire for example , you may not want to resell it (so no tax on capital gain, and even if you sell many years after leaving Japan I don't think the Japanese tax office will hunt you down...)

https://www.tytoncapital.com/investment-advice-japan/reduce-tax-japanese-real-estate/

 

[MikeH]

Anyone else have more information on this?

You didn't read the booklet either?

Though the information it provides is not enough and you should consult a tax lawyer in case you really think using this deduction. FWIK it can be beneficial if you can deduct it from your salary now and then leave the country and sell it later.

 

[TAG_Member]

You can google and find various articles but the one I found most helpful is the link below as they mention the loophole on foreign houses . I was wrong by the way, it's apparently better to buy an OLD wooden house , but I'm no expert , didn't do this myself, and of course not affiliated in any way with the people who wrote this. But obviously if you buy the home in your home country or anywhere where you want to retire for example , you may not want to resell it (so no tax on capital gain, and even if you sell many years after leaving Japan I don't think the Japanese tax office will hunt you down...)

https://www.tytoncapital.com/investment-advice-japan/reduce-tax-japanese-real-estate/

Thank you.

If anyone here have 1st hand experience on tax cutting either for personal tax or corporate tax, please let me know! It is almost impossible to find a good accountant who knows how to push the boundaries - not for the fees I pay anyway!!

 

[Frenchy]

Thank you.

If anyone here have 1st hand experience on tax cutting either for personal tax or corporate tax, please let me know! It is almost impossible to find a good accountant who knows how to push the boundaries - not for the fees I pay anyway!!

Maybe assimilate mongering as some kind of charity activity with all "donations" deductible from revenues ?

 

[TAG_Member]

Maybe assimilate mongering as some kind of charity activity with all "donations" deductible from revenues ?

Already on it. Tax authorities aren't buying my penis depreciation idea...

 

[SugoiBoy]

Regarding the US expats in Japan, it is unfortunate that Americans working abroad appear to have been largely forgotten by both of the major political parties.

The foreign earned income exclusion on federal income taxes is simply too low at the moment. The amount covered should be increased significantly. This is especially a problem for Americans living in Tokyo with its relatively high cost of living when compared to, say, most cities in Southeast Asia.

Also, under the current tax law, there is a perverse disincentive to spend time back in the states. One is effectively encouraged to stay overseas.

Expats from certain other countries just don’t have to face such issues.

 

[just4fun]

Quick question. When is the earliest we can do our taxes here in Japan? I mean, when can we drop off our tax papers. Feb 15th?

 

[MikeH]

Quick question. When is the earliest we can do our taxes here in Japan? I mean, when can we drop off our tax papers. Feb 15th?

Must suck to be one of the guys writing the tax guide for foreigners as it seems nobody actually reads it!

Like it says in the cover page: February 16th.

Of course they also say there that if you are getting a refund you can file also earlier and don't say how much earlier .

 

[Frenchy]

Must suck to be one of the guys writing the tax guide for foreigners as it seems nobody actually reads it!

Like it says in the cover page: February 16th.

Of course they also say there that if you are getting a refund you can file also earlier and don't say how much earlier .

In some of them they insert a Willie Wonka gift card (ok maybe that will increase the readership a bit...)

 

[TokyoJoeblow]

Ok, so before I ask another question...I want to verify that I did read all of this: https://www.nta.go.jp/tetsuzuki/shinkoku/shotoku/tebiki2016/pdf/43.pdf

So Sigourney Weaver can just back off! lol

Anyway, I realize that if I want to apply for tax deductions I will need to fill out the forms but if my English schools already fill out and turn in my taxes...then why do I need to file (other than for deductions)?

Sorry if it is a dumb question, but my foreign friend who has been living and teaching English here for like 15 years said that I shouldn't need to go to the tax office at all?

On that tax guideline, I did read about how we are required to pay taxes for the earthquake reconstruction? Hmm...what other things are we required to pay taxes on that isn't already covered by our employers?

 

[MikeH]

Anyway, I realize that if I want to apply for tax deductions I will need to fill out the forms but if my English schools already fill out and turn in my taxes...then why do I need to file (other than for deductions)?

If you had salary from one place only and they did the year-end adjustment then you don't need to file. Of course if you have deductions they didn't take into the calculations then you can to declare them and file. In that case you need to calculate the correct sums yourself (self assessment system) and that's why you need to fill and return the whole tax form.

 

[TAG_Member]

Depends if you are hired as an employee or a self employed contractor.

 

[TokyoJoeblow]

Depends if you are hired as an employee or a self employed contractor.

I will verify this later this week. Thank you for this key piece of information.

 

[TokyoJoeblow]

If you had salary from one place only and they did the year-end adjustment then you don't need to file. Of course if you have deductions they didn't take into the calculations then you can to declare them and file. In that case you need to calculate the correct sums yourself (self assessment system) and that's why you need to fill and return the whole tax form.

Well this friend of mine had worked full time at one school for some years and for other years has worked part time at multiple schools. Here is the thing though...he told me that in both situations, he never went to the tax office once. He didn't even go there to pick up the forms to fill out and mail. When I asked why, he told me that the schools he worked at would do the taxes for him?

He has his own school now that he runs with his wife, so he files now but for all the years where he was working for someone else. he never filed himself.

 

[MikeH]

When I asked why, he told me that the schools he worked at would do the taxes for him?

That's what the "year-end adjustment" means. If the schools have all the information they can calculate your taxes and then at the last salary payment of the year adjust it so that you have paid the correct amount of taxes.

 

[TokyoJoeblow]

That's what the "year-end adjustment" means. If the schools have all the information they can calculate your taxes and then at the last salary payment of the year adjust it so that you have paid the correct amount of taxes.

Ok, so if my employers do this for me then I don't need to fill out a tax form, regardless of whether or not I work full time at one school or part time at two schools?

 

[Rusty Trombone]

What @MikeH says it totally correct.

It's simple. If you work for multiple companies, each taxes you as if they are you sole source of income, so if you only work for one company then you taxes are taken care of and are correct.
If you work for multiple places then you may find that your aggregate income moves you into a different tax rate, so you need to file a tax return.
It's not difficult. All your employee will give you a small piece of paper called a "genzenchoshusho". Just use those to determined your income and tax paid and then take it to the tax dept and see if you owe taxes.

Not to criticize you, but you really come to the wrong places for advice my friend. Go and talk to the tax dept, or an accountant.
I doubt if "but my friends on a mongering forum told me this..." will work well at the　税務署!

 

[Sudsy]

Ok, so if my employers do this for me then I don't need to fill out a tax form, regardless of whether or not I work full time at one school or part time at two schools?

If you work for multiple employers, you need to file your income taxes, as your employers will not take into account your other income when calculating your taxes.

The bad news - you'll almost certainly owe some, as all of your employers will give you the basic earned income credit, which you can only actually claim once.

 

[TokyoJoeblow]

If you work for multiple employers, you need to file your income taxes, as your employers will not take into account your other income when calculating your taxes.

The bad news - you'll almost certainly owe some, as all of your employers will give you the basic earned income credit, which you can only actually claim once.

Well that sucks. You would think I would owe less if I'm making less overall than the dude who makes bank working a full time job...who probably gets money back after filing lol.

Is the amount people owe in taxes ever unreasonably high or is that rare? I know it depends on how much people earn, but just based on the average or below-average English teacher income?

 

[meiji]

Well, as Sudsy said, generally you don't have to 'file taxes' at all in Japan if you have a single employer and the form they give you is correct. You are going to owe money because you'll likely be in a higher tax bracket when you include your second job because it wasn't calculated properly.

This doesn't mean that a 'dude who makes bank working a full time job' doesn't pay more tax than you throughout the year, though.

 

[Sudsy]

Is the amount people owe in taxes ever unreasonably high or is that rare?

Well, personally I believe that all taxation is theft so.....

 

[TokyoJoeblow]

Well, I talked with a different foreigner that has been teaching English here for like 12 years and he said the same thing as my other friend. He told me that in all his years working both full time at one company and part time at multiple companies, he never once filed for taxes himself. Both of these friends also mentioned they have never had issues with regard to taxes or spouse visa issues either.

I will of course talk about this with my bosses, but I wanted to share the second opinion on here.

 

[MossBoss]

In addition your City Tax bill is related to your earnings. If you don't file your taxes your City Tax bill is likely to be wrong. You might even be paying more than you should.

 

[MikeH]

I will of course talk about this with my bosses, but I wanted to share the second opinion on here.

Well, you said you read the document, but it seems you didn't understand what it says!

Page 9, Chapter 1-2 Who Must File A Final Return, Section 1. An Employment Income Earner, item (3) deals with your case if you have multiple employers.

However I would strongly suggest you do the calculations yourself in any case; it's not complicated and if you have any deductions your employers don't know it is fairly probably you'll end up paying less taxes if you file yourself.

Of course if you are happy to pay more for the benefit of this great nation then of course you are welcome to do it!