Furosato Nozei - For someone who has just started paying residence tax

[Viralriver]

Hi, I know there have been some furosato nozei threads, but not found anything directly relevant to my question.

Looking online, it seems you need to enrol by December to have that year's tax payments eligible for deduction. This year was my first year of paying residence tax, but it only started mid-way through my new job. I paid ¥57,900 in June this year, and ¥57,100 each month since. My current company also does my taxes for me, the only thing I need to do is fill in a tax-withholding statement (which I have done already this year, and submitted).

Question: With this in mind, am I eligible to enroll this year, and if I am, how can I calculate how much I can use - and what is the process? I have found a few guides online, but with conflicting information, and I don't want to send out $$$ to a random prefecture and find out I messed up the procedure!

Thanks in advance

[taneandy]

Furusato nozei deductions for "donations" made up until the end of this year will be for income that you've received during this calendar year.
So if you have earned income in Japan this year, you should be eligible.
To get the deductions you will either have to do 確定申告, in which case the deduction will be from both residence tax and income tax, or use the "one-stop system", in which case the deduction will be entirely from residence tax.
To use the one-stop system you need to get the paperwork submitted to the local authorities to which you donated by January 10th next year in order to get a deduction from your residence tax bill that will be issued around June of next year. In other words, any donations made by the end of this year will help to reduce the residence tax you start paying monthly from around June/July next year.

There are plenty of calculators online that will give you a rough estimate of the maximum deduction you can receive based simply on your income for this year, but things like your number of dependents and other tax deductions also make a difference.

[Viralriver]

Furusato nozei deductions for "donations" made up until the end of this year will be for income that you've received during this calendar year.
So if you have earned income in Japan this year, you should be eligible.
To get the deductions you will either have to do 確定申告, in which case the deduction will be from both residence tax and income tax, or use the "one-stop system", in which case the deduction will be entirely from residence tax.
To use the one-stop system you need to get the paperwork submitted to the local authorities to which you donated by January 10th next year in order to get a deduction from your residence tax bill that will be issued around June of next year. In other words, any donations made by the end of this year will help to reduce the residence tax you start paying monthly from around June/July next year.

There are plenty of calculators online that will give you a rough estimate of the maximum deduction you can receive based simply on your income for this year, but things like your number of dependents and other tax deductions also make a difference.

Thanks for the reply. If I understand correctly, if I use the one-stop system, I simply choose my "gifts", pay, and then my residence tax will be reduced automatically without any other tax-related filings?

My main concern is that I have already filled out the end of year tax-withholding statement. I'm unsure if this affects the process at all?

Secondly, I only started paying residence tax this year, and I'm assuming this is based on my salary from last year (10m). My salary has changed since April this year (18.6m) and will reduce to 18.3m in April next year. Because of this, I'm very confused as to what number to use for calculating the deductions. I don't want to send hundreds of thousands of yen to find out that actually the majority of it was not refundable ^^' . But I also would like to take advantage of this sytem and get lots of holidays for free!

If have any answers there please do let me know!

Thanks

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EDIT: Additional query that has come up. I was looking into this simulation page to see what my limit is. It says to use the data from the end of year tax-withholding statement that I receive from my company. However, I asked my company for this and they say they can't provide it until January next year as that is when it gets processed. So am I supposed to make these calculations based off of my salary from last year instead?

[adamu]

If I use the one-stop system, I simply choose my "gifts", pay, and then my residence tax will be reduced automatically without any other tax-related filings?

No. You get sent a form by each authority you donate to, which you have to post back with copies of your my number and identification documents. You can only donate up to 5 locations, any more and you have to do a tax return. Also, if the forms don't arrive back at their office by 10 Jan, you have to do a tax return.

My main concern is that I have already filled out the end of year tax-withholding statement. I'm unsure if this affects the process at all?

Are you talking about the end of year tax adjustment, nenmatsu chousei? That doesn't affect the process.

I'm assuming this is based on my salary from last year (10m). My salary has changed since April this year (18.6m) and will reduce to 18.3m in April next year.

No, as taneandy explained, the donations will be deducted from next year's tax, which is calculated from this year's income. So you should use an estimate of your income for this year.

[Viralriver]

.

Thank you - that is really helpful. It seems like this process heavily depends on me being able to keep my salary where it is, and with Covid etc that's difficult to be sure about haha. I might do it this year based on my previous year's income and see how it goes, then gradually increase next year. But since my salary is only going down from here, it's a bit of a weird process in general!

Thanks for the help. I'm going to see if there's actually anything I want on the website

[mighty58]

EDIT: Additional query that has come up. I was looking into this simulation page to see what my limit is. It says to use the data from the end of year tax-withholding statement that I receive from my company. However, I asked my company for this and they say they can't provide it until January next year as that is when it gets processed. So am I supposed to make these calculations based off of my salary from last year instead?

Funny how they do that eh? The only way to get an accurate estimate (oxymoron?) is to use last year's statement, but even that can be problematic because incomes/circumstances change. FYI, small changes in salary (ie. 18.3 to 18.6) won't hardly make any difference at all, but a big change (like 10 to 18) will indeed. To play it safe, use your lower income estimate and then undershoot that. Also play around with the numbers in the simulator to understand how much the deductible amount changes. You don't want to be left holding the bag on an actual donation you didn't mean to make.