Furusato Nozei One Stop Exception

[esotEric]

Hello,

I don't have any experience with the hometown tax deduction.* My understanding is that if my company files my taxes (which it does) and I'm only contributing to one or two municipalities, I'd be better off using the "one stop exception" system. Does anyone have any experience with this system? Apparently, the deduction will be applied to the follow year's return. Do I need to notify my company like I do for private insurance premium deductions? And how can I confirm whether the deduction was applied?

Thank you in advance.

*(Every year I want to apply for the hometown deduction, and every year around this time I get overwhelmed and give up. I don't have a particularly high salary, so at some point it starts to seem like more effort than it's worth.)

[esotEric]

I don't know if this is relevant, but I used furusato-tax.jp's calculator and plugged in the numbers from my withholding form. I assume the number I was given is accurate?

[adamu]

First you need to clarify if you do a tax return (確定申告) or just the end of year tax adjustment (年末調整).

It sounds like you only do the year end tax adjustment, but you also mentioned "the following year's return", which is ambiguous.

Some info here https://retirewiki.jp/wiki/Furusato_Noz ... top_System

[esotEric]

Thanks Adamu,

I don't submit any paperwork to the ward office myself. I submit paperwork to my company labeled "Tax Adjustment Forms." So I think your initial assessment was correct. (I mistakenly assumed my company was filing tax returns on my behalf, but it seems like they are doing something slightly different by adjusting them.)

I guess I'm just nervous that I'm going to screw something up and lose money. If I use the one stop exception, is it fairly automated? Are there any drawbacks or things that could go wrong that I should be aware of? My understanding is that I will pay that amount less in taxes (-2000 yen) in 2024. Is that right?

The only people I know who use furusato nozei are Japanese and file their own taxes. I guess I just need some reassurance from someone in the same boat so I can pull the trigger.

Also, if the furusato-tax.jp calculator (though which I inputted numbers directly from my withholding form) says I can contribute X amount of money, how close to X is it safe to contribute? The reason I ask is that the gift I have my eye on is only 600 yen less than my maximum possible contribution according to the calculator. Is that cutting it too close?

Again, that's in advance.

[zeroshiki]

Thanks Adamu,

I don't submit any paperwork to the ward office myself. I submit paperwork to my company labeled "Tax Adjustment Forms." So I think your initial assessment was correct. (I mistakenly assumed my company was filing tax returns on my behalf, but it seems like they are doing something slightly different by adjusting them.)

I guess I'm just nervous that I'm going to screw something up and lose money. If I use the one stop exception, is it fairly automated? Are there any drawbacks or things that could go wrong that I should be aware of? My understanding is that I will pay that amount less in taxes (-2000 yen) in 2024. Is that right?

The only people I know who use furusato nozei are Japanese and file their own taxes. I guess I just need some reassurance from someone in the same boat so I can pull the trigger.

Also, if the furusato-tax.jp calculator (though which I inputted numbers directly from my withholding form) says I can contribute X amount of money, how close to X is it safe to contribute? The reason I ask is that the gift I have my eye on is only 600 yen less than my maximum possible contribution according to the calculator. Is that cutting it too close?

Again, that's in advance.

Its very late in the year to do this so you're cutting it very close but if you have a MyNumber Card (as in a real card not the paper notice card) most prefectures, at least the ones who seriously do furusato nozei, allow you to do online one stop. If you buy now, you'll get the one stop notification hopefully tomorrow but if not, in the new year. You then need to use your MyNumber card to "submit" the one stop form.
If you don't have a card (or there's no online option for your city), the only way to do one-stop is through paper forms and they have a hard deadline of January 10th the forms MUST arrive in the city you used furusato nozei from.

[adamu]

If you use one-stop, the deduction (donation - ¥2000) is applied directly to your residence tax the following year. You can confirm the deduction amount on the slip you should get from HR in May, with the new monthly tax amount starting from June. You don't have to file anything with your company, but you do have to submit a one stop form to each municipality you donate to.

As zeroshiki said, considering the one stop form (explained on the wiki link above) has to arrive at the donee by 10 January, it might be pushing it this year, especially as you're not sure how it works. You could do it, but maybe give it a miss this year and try it next year, giving you plenty of time to understand the system? If you don't make it in time, you have to do a tax return instead, and then it gets a lot more complicated.

if the furusato-tax.jp calculator (though which I inputted numbers directly from my withholding form) says I can contribute X amount of money, how close to X is it safe to contribute? The reason I ask is that the gift I have my eye on is only 600 yen less than my maximum possible contribution according to the calculator. Is that cutting it too close?

If it's based on your actual tax figures for this year, it should be accurate. But I'd probably leave at least a 10% buffer just in case there are things that weren't accounted for in the simulator (e.g. you have iDeCo and didn't enter that information correctly, etc.).

[esotEric]

Thanks for the replies. You're probably right about not taking any risks this year by cutting it so close.

Thanks again.