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Tax Season 2014

2014/02/19

It's nearly time to submit your taxes in Japan. A daunting task for anyone, but luckily there are helpful guides for you. GaijinTax.com breaks down the whole process into 4 steps, helping to fill out your Receipts, Expenses, and Tax Declaration Forms.

The general idea is that each month your employer withholds income taxes from your paycheck to be paid to the government. For tax season you calculate your total yearly income and try to determine how much of your income was truly taxable. Often times there are chunks in your budget that are not technically 'taxable', so that amount has to be paid back to you by the government. So part of what you are doing when filing taxes is announcing your taxable income by deducting dependents and expenses from your net income, and hoping for some payback from the government,... So I guess payback isn't always a b****.

Gaijintax explains that someone with a total income of around 4.9million yen, and expenses of 2.1million yen (a wife and child) is left with  a taxable income of only 200,000-300,000yen.  This means a tax contribution of around 10,000-20,000yen.  Assuming that he or she has Tax Withheld by their employer(s), that person could expect to get around about 150,000yen as a tax return

The deadline for filing your Japanese income tax is March 15th.

But that's not all, with a new law raising the consumption tax from 5% to 8% from April 1st 2014, with an eventual rise to 10% in October 2015, you can expect to be hearing about taxes in the news. But consumption tax will likely be paid with each purchase at the cash register, and not in paperwork.

If you are a US citizen, you are responsible to pay US tax if you earn more than around $90K a year. So, most English teachers probably don't need to worry about paying double taxes. But with the new Foreign Account Tax Compliance Act, even American individuals who live outside the United States must report their finances outside of the US as well. This even includes the financial status of your non-American spouse as well, so your Japanese husband has to reveal his financial status to the American IRS. Much to the outrage of many families living outside the United States. I guess the IRS doesn't want to fall behind the NSA with the trends of eroding liberty and privacy. As an American myself, I'm just glad that I don't have to pay for a US insurance plan through the Affordable Care Act (Obamacare) since I cannot receive that care while living abroad. So we dodged the bullet on that one.

But head over to GaijinTax.com to get started on your taxes!

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