Was my furusato nozei calculation correct?

[Viralriver]

Hi all, so I did my furusato nozei last year at the end of December after trying multiple simulators and selecting the one which gave the lowest amount, and then even deducted some additional money off of that to ensure I was not paying too much.

Anyways, I just received my tax slip today (令和4年度給与所得等に係る市民税・県民税特別徴収税額の決定通知書) and I have a strange and unpleasant feeling that the actual calculation has given me a value far less than all of the simulators and I've ended up buying things for obscene prices for no reasons.

Before I panic too much, can someone help me learn exactly how to read this?



I found this image when searching which gives the very clear idea that the sum of thsoe two values at the bottom are my max furusato amount. Is this true, or is there some additional complication? Because this is far below what I had calculated.

If it makes a difference, I did not do one-stop.

Thanks!

[zeroshiki]

I'm not sure what two fields you're talking about but these are the 2 fields:


The sum of those -2000 should be the amount you had deducted which is normally your furusato nozei contribution but these fields also have other tax discounts you might have used so its not 100% accurate. This isn't your max furusato nozei allowance but is the actual amount you got deducted because of furusato nozei.

Your furusato nozei allowance is calculated based on how much tax you paid. I just use the various simulators available on the internet but its a little bit more than 10% your yearly income but the percentage increases the higher your income (since you pay more tax).

[Viralriver]

Thanks - yeah it seems that this is significanly less than what I put in for furusato (~60k or so less). What do you mean it's not necessarilly my max furusato allowance though - is it possible that I didn't overpay by ~60k?

[Tkydon]

You have to remember that the Furusato Nozei Tax Refund Deduction is calculated to reduce the actual total amount of tax you actually pay by the amount of tax you assigned to the remote Tax jurisdiction.

This is a very complex calculation, because when you reduce your Taxable Income it has a different amount of effect on your National, Reconstruction and Residents' Taxes, depending on which Marginal Tax Band or Bands the Taxable Income is reduced from, so the actual amount of Taxable Income reduction will be less than you think to achieve the actual tax reduction amount.

The Taxable Income Deduction will be smaller for each higher Marginal Income Tax Band for the same resulting amount of actual tax reduction.

[zeroshiki]

Thanks - yeah it seems that this is significanly less than what I put in for furusato (~60k or so less). What do you mean it's not necessarilly my max furusato allowance though - is it possible that I didn't overpay by ~60k?

Hmm.. so it seems like the process to check how much furusato nozei reduced your tax bill is different if you did kakutei shinkoku.

So those fields seem to just be a part of your deduction. You then have to add the value of: ("total donation" - 2000) x income tax rate x 1.021 to it.

https://furu-sato.com/magazine/11491/

[Viralriver]

Thanks - I've taken a look at the page but seems a little confusing. It seems that there are two things I need to calculate (2) and (5) where:

(2): (寄附金額-2,000円)×所得税率×1.021(特別復興所得税)を計算する
(5): 控除されている市民税と都民税の合計金額を計算する

according to the kakutei shinkoku section on that page. And then compare the values and make sure they match up.

Is the value for 所得税率 supposed to be less than 1? I.e. a percentage of 33% would be 0.33 here rather than 1.33? Potentially a stupid question, but just wondering since if I assume it's 0.33 my value for (2) is roughly half of (5), which seems completely off!

[zeroshiki]

Thanks - I've taken a look at the page but seems a little confusing. It seems that there are two things I need to calculate (2) and (5) where:

(2): (寄附金額-2,000円)×所得税率×1.021(特別復興所得税)を計算する
(5): 控除されている市民税と都民税の合計金額を計算する

according to the kakutei shinkoku section on that page. And then compare the values and make sure they match up.

Is the value for 所得税率 supposed to be less than 1? I.e. a percentage of 33% would be 0.33 here rather than 1.33? Potentially a stupid question, but just wondering since if I assume it's 0.33 my value for (2) is roughly half of (5), which seems completely off!

It would be 0.33 I assume and you're supposed to add 2 and 5 together. I have never done kakutei shinkoku with furusato nozei so maybe someone else can chime in but according to that site, that's how you're supposed to calculate it.

[Tkydon]

They have to provide you a Taxable Income Deduction Value that will produce the necessary Actual Tax Reduction to account for the 10% Residents' Taxes that you have assigned from your Prefecture and Municipality to the Prefecture and Municipality of your Donation and the Tax relief on the Charitable Donation minus Y2000, but the calculated Deduction amount has the effect of reducing your Total Taxable Income, which in turn reduces your National Tax by your Marginal Tax Rate (33%), Reconstruction Tax by 0.21% of your National Tax Reduction (0.693%), and Residents' Taxes by 10%.

Therefore, the amount of the Calculated Deduction will not match the Furusato Nozei purchase amount.

If you run two Tax Calculations, one before deducting the calculated Deduction Value and one after deducting the calculated Deduction Value, you should find that Net Tax payable has been reduced by the correct amount.

[TBS]

Thanks - I've taken a look at the page but seems a little confusing. It seems that there are two things I need to calculate (2) and (5) where:

(2): (寄附金額-2,000円)×所得税率×1.021(特別復興所得税)を計算する
(5): 控除されている市民税と都民税の合計金額を計算する

according to the kakutei shinkoku section on that page. And then compare the values and make sure they match up.

Is the value for 所得税率 supposed to be less than 1? I.e. a percentage of 33% would be 0.33 here rather than 1.33? Potentially a stupid question, but just wondering since if I assume it's 0.33 my value for (2) is roughly half of (5), which seems completely off!

It would be 0.33 I assume and you're supposed to add 2 and 5 together. I have never done kakutei shinkoku with furusato nozei so maybe someone else can chime in but according to that site, that's how you're supposed to calculate it.

Yes, this is correct. Add (2) and (5) together too calculate the total amount of tax (national + residents) saved. If you do furusato nozei via kakutei shinkoku, it's partly national tax and partly residents tax that is saved. With one-stop, it is only residents tax that is saved.

There is an easier way than all of this to check how much was saved - just look at box 28 (寄附金控除) on your tax return. This is the accepted amount of furusato nozei contributions, minus 2000 yen.

The tax return system automatically maxes out if you go over the limit, so if this number is less than than your actual contributions minus 2000 yen, then you've over-donated.

Note the figure in box 28 can also include political or charitable donations, if you made those: https://www.nta.go.jp/taxes/shiraberu/s ... 3-3_24.htm. They share the same limit.

[Viralriver]

Thank you! The numbers add up perfectly and I haven't just spent stupid money on melon!