Tokutei kouza types and pro/cons

[sutebayashi]

For my Monex tokutei kouza, I currently use a 源泉徴収あり type.

One of the advantages of this is for people who don't want to deal with 確定申告 procedures.
https://info.monex.co.jp/service/tokute ... point.html

In my case, I have been doing 確定申告 for years anyway, since I need to report profit/loss on my futures account, and also I report my furusato nozei donations this way as well.

For my most recent tax return, I still found I had to include details from my Monex tokutei kouza account anyway, which made me feel a little anxious because the taxes are of course retained at the source, so why do I need to report them on my 確定申告 at all?

I would also kind of like to delay paying my taxes as long as legally possible, which seems to be the case if going for a 源泉徴収なし type.
(If by chance my extra income turned out to be less than 200,000 yen I understand I wouldn't even need to file a tax return)

Does anyone have any experience going with a 源泉徴収なし type tokutei kouza, and was the 確定申告 procedure for it relatively painless? Since I am needing to report my 源泉徴収あり income anyway even though it is taxed at the source, I tend to think I might prefer to flip to 源泉徴収なし and pay the taxes in a lump sum each spring.

[sutebayashi]

Found a decent looking article in Japanese that largely confirms what I had been thinking.
https://advisors-freee.jp/article/categ ... l-01/4639/
Either way, if doing a tax return, the annual tokutei koza report from the securities firm should have the info needed, so it doesn’t seem daunting, as one can just use the calculated numbers of both cases.

(The article notes some potential disadvantages to not going with withholding at the source type, but those shouldn’t be applicable in my case)

[Gareth]

I was thinking the same thing since I’m self-employed and do my own taxes. I didn’t quite fully appreciate the difference when I set up my Monex account so I went with a tax withholding account as it sounded “safer”.

I only have some bonds in there which I don’t plan on selling any time soon so I don’t think it really affects me.

But something to think about in the future when I am ready to sell.

Thanks for posting the link. Was an interesting read!

[regular]

I am in a somewhat similar situation like sutebayashi. I have individual stocks in Monex tokutei kouza and they cut over 20% of all the dividends at source. I have never applied for kakutei shinkoku regarding this Monex investment account. I am under water for many years and do not even look at it.

I am in a pensionable job at a private university and am in a high tax bracket. I got some relief after buying a house. I have never invested in NISA, iDeco, J-NISA etc. I am only 7 years away from mandatory retirement. Now that NISA amount has been fixed upwards, is it beneficial for me to use up the 18 million yen lifetime contribution in the next 7 years (taxwise). Even I do not make any money but can lower my tax by going down a bracket, I would still consider it a good idea.

My investment record is very poor and so, I really do not want to do research on individual stocks. Berkshire Hathaway is Ok, but we can not do it easily from here in Japan, right.

[Tkydon]

For my most recent tax return, I still found I had to include details from my Monex tokutei kouza account anyway, which made me feel a little anxious because the taxes are of course retained at the source, so why do I need to report them on my 確定申告 at all?

I would also kind of like to delay paying my taxes as long as legally possible, which seems to be the case if going for a 源泉徴収なし type.
(If by chance my extra income turned out to be less than 200,000 yen I understand I wouldn't even need to file a tax return)

Does anyone have any experience going with a 源泉徴収なし type tokutei kouza, and was the 確定申告 procedure for it relatively painless? Since I am needing to report my 源泉徴収あり income anyway even though it is taxed at the source, I tend to think I might prefer to flip to 源泉徴収なし and pay the taxes in a lump sum each spring.

The main reason for doing the 源泉徴収あり is so that you do not have to deal with filing the taxes or paying a large lump sum in April. This is much the same as Tax Withholding from your Salary by your company.

However, if you do have to do Kakutei Shinkoku, then you have to put in the information from all of your 源泉徴収表 so that the system can calculate the correct figures for all of your income, but you get full credit for all the taxes withheld. There is nothing to be anxious about.

If you have Japanese Dividend Income, and your total income is less than about Y6.6M, then you may get a lower tax rate using the Aggregate Taxation Method than the Separate Taxation Method with Withholding.
If you have Overseas Dividend Income, and your total income is less than about Y3.3M, then you may get a lower tax rate using the Aggregate Taxation Method than the Separate Taxation Method with Withholding.
If you have paid Overseas Withholding you can also claim the Foreign Tax Credit.

If you go with 源泉徴収なし you will have to do all the forms for all the transactions yourself.
With the 源泉徴収あり you only need to transfer the numbers from the 源泉徴収表 to the 確定申告. Much easier.

If you are claiming Furusato Nozei, then the limit is dependent on your total Income, so you have to add in all sources of income, and all deductions, especially the Medical Spending Deduction for Medical Expenses over Y100,000.

If you go with 源泉徴収なし you will always have to do the 確定申告
If you go with 源泉徴収あり you can choose to do the 確定申告 in years when it suits you to do so, and ignore it completely in other years.

Of course, you will have to find the full tax amount in April as nothing will have been withheld through the year.
If you have a large amount of 源泉徴収なし income, the Tax Office may choose to send you a bill for 予定納税 in the following year to ensure you are not blind-sided by a big tax bill...

[Tkydon]

I am in a somewhat similar situation like sutebayashi. I have individual stocks in Monex tokutei kouza and they cut over 20% of all the dividends at source. I have never applied for kakutei shinkoku regarding this Monex investment account. I am under water for many years and do not even look at it.

I am in a pensionable job at a private university and am in a high tax bracket. I got some relief after buying a house. I have never invested in NISA, iDeco, J-NISA etc. I am only 7 years away from mandatory retirement. Now that NISA amount has been fixed upwards, is it beneficial for me to use up the 18 million yen lifetime contribution in the next 7 years (taxwise). Even I do not make any money but can lower my tax by going down a bracket, I would still consider it a good idea.

My investment record is very poor and so, I really do not want to do research on individual stocks. Berkshire Hathaway is Ok, but we can not do it easily from here in Japan, right.

You should probably redirect these questions to the relevant Sections; iDECO and NISA.

iDECO - You pay Pre-Tax Income In and pay tax at your Marginal Tax rate in retirement when you receive the distributions.
NISA - You pay Post-Tax Income In and receive the distributions completely Tax Free, no matter how much profit you make.

These are not the same as the Dividend, Interest and Capital Gains Taxes calculated in the Tokutei Kouza...

[sutebayashi]

Thanks for the notes, Tkydon.

Yes, I was mostly anxious because it seemed like my tokutei account with 源泉徴収あり was changing my tax amount due, whereas I had been thinking that it shouldn't change my tax return result, because the tokutei account tax was paid at the source. This thinking was not correct I see.

If you are claiming Furusato Nozei, then the limit is dependent on your total Income, so you have to add in all sources of income, and all deductions, especially the Medical Spending Deduction for Medical Expenses over Y100,000.

This in particular is something I had been missing. I was not aware of these other types of non-salary income (in my case, futures trading income and tokutei account proceeds) also contributing to the Furusato Nozei limit calculation, and this is something I need to take into consideration this year. Many of the Furusato Nozei limit calculators online are quite basic ones, but there are a lot of factors coming into consideration that can change the result.
Maybe using the NTA kakutei shinkoku site to create a dummy tax return for the purposes of playing with Furusato Nozei donation numbers might be the most solid way to verify.