Takashi Yamaguchi, English Speaking Japanese Tax Accountant

Simple questions about Japanese final income tax returns (2)

Continued from last blog, I talk about “simple questions” you may have when filling in final income tax return.

Which tax office to submit?

Submit it to the tax office that has jurisdiction over your current address. Although there are special cases that can be submitted to other tax offices, it is necessary to notify in advance to the tax office, to which you originally have to file the tax return. You can search the jurisdiction tax office of the address area from here by zip code / address.

Address as of when should be filled in?

In the income tax return declaration for Heisei 30 years (2018) there are columns to fill in “Address” and “Address as of January 1, Heisei 31 (2019).” For “address”, indicate the address on the day when that tax return form is to be submitted. If “address on January 1, 2019” and “address” are the same, in the “address on January 1, 2019”, write “same as above”. If different, write the address as of that day.

Should declare an unemployment allowance as well?

The basic allowance based on the employment insurance system called “unemployment allowance” or “unemployment benefit” is not regarded as “income” in the income tax law in the first place, so it is not necessary to include it in the declaration. Even for judgment of spouse deduction or dependent deduction, it is not counted as “income”.

Incidentally, Article 9 of the Income Tax Law provides certain type of income, which are “income” but not taxed from political perspective (non-taxable income). The prize money of the Nobel prize is one of them (paragraph 1 item 13, Ho).

Should declare income of insurance claim?

It is determined by the relationship between the insured person, the contributor of the insurance premium (the person who actually paid the insurance fee), and the beneficiary of the insurance payment.
If everything is yourself, you will be subject to income tax, accordingly you need to declare such income.
Otherwise, it is not necessary to declare the income tax, but depending on the amount, you may need to declare gift tax / inheritance tax.

Can not deduct medical expenses unless the total of medical expenses exceeds 100,000 yen?

Some people say “medical expenses deductions can not be made unless the payment amount exceeds 100,000 yen”, but this is incorrect. To be accurate, “the lesser of the 5% of the total amount of income or 100,000 yen” is the threshold.
Therefore, if the income amount is less than 2 million yen, medical fee deduction can be taken even if the total medical cost is 100,000 yen or less.

By the way, the hurdle for the self-medication deduction is fixed as low as 12,000 yen. Even when it can not exceed the hurdle for medical expenses deduction, if the sum of purchase price of over-the-counter medicine exceeds 12,000 yen, you can claim deduction of the self medication (88,000 yen at maximum). If it exceeds the hurdle for medical expenses deduction , you can claim deduction of medical drugs (limited to those purchased for therapeutic purposes only) as well as medical cost at clinics and hospitals.
So, in any case, it is better to keep the pharmacy receipt.

Is social insurance fees for family members also deductible?

When a householder pays the social insurance fee of his/her family (spouse / dependents relatives) who is economically depending on that householder, the householder can deduct such social insurance fee for the family from own taxable income by attaching a payment certificate.

Is certificate always needed for taking deduction of social insurance fee?

To take deduction of social insurance fee related to payment of national pension and national pension fund, it is necessary to submit the original copy of deduction certificate (submission omitted for electronic filing).

With regard to social insurance fees other than the National Pension and National Pension Fund, the deduction certificate itself is not necessarily issued, so it is only necessary to enter the amount but attachment of the deduction certificate is unnecessary.
Therefore, it is necessary to check and fill in actual paid amount of the insurance fee from January 1 to December 31 by yourself.
More specifically, cash payment receipt, bank book of direct debit, confirmation with the municipality by phone, would be necessary.

Social insurance fee withheld from spouse’s pension is also deductible?

When social insurance fees such as nursing care insurance premiums are withheld from your spouse’s public pension, it is obvious that such social insurance fee had been paid by that spouse. Therefore, it is not regarded as a social insurance fee paid by you, cannot be deductible.
On the other hand, regarding insurance premiums payable after April 2009, by making certain procedures to municipalities, etc., it is possible to choose to pay insurance premiums by account transfer instead of withholding from pensions.
In this case, social insurance fee deduction is applicable to those who paid the insurance premium by direct debit (limited to spouse or other relatives living with the insured).

How the social insurance fees paid in advance would be treated?

When the national pension premiums for two years are paid in advance, it is possible to deduct either the full amount for that two years at once or the amount corresponding to each year.
Since the deduction certificate is divided beforehand and sent separately for each year in advance, you can choose either one to attach at the time of tax return filing.
Reference: https: //www.nenkin.go.jp/faq/kokunen/seido/kojoshomei/20180221.html

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