Filing Japanese Income Taxes for 1st time

[solo7100]

Got it, but just so I’m clear (going to be dealing with lots of monies if we are talking 5 years): (numbers just for ease of understanding)

Move to Japan 2024
Year 2024 pension: $1000
Year 2025 pension: $1000
Year 2026 pension: $1000
Year 2027 pension: $1000
Year 2027 pension: $1000
ALL ABOVE STAYS IN HOME COUNTRY.

Bring the accumulated $5000 to Japan —> not taxed
Starting year 2028 pension: $1000 bring to Japan, and somehow make it clear that the $5000 is NOT pension but rather savings thus paying taxes only on the $1000 brought for year 2028 (now being a non-permanent resident for tax purposes or something ya).

Is my understanding clear? As mud?

Thanks so much…don’t want any nasty surprises 5 years from now…

[Tkydon]

Got it, but just so I’m clear (going to be dealing with lots of monies if we are talking 5 years): (numbers just for ease of understanding)

Move to Japan 2024
Year 2024 pension: $1000
Year 2025 pension: $1000
Year 2026 pension: $1000
Year 2027 pension: $1000
=> Year 2028 pension: $1000
ALL ABOVE STAYS IN HOME COUNTRY.

Bring the accumulated $5000 to Japan —> not taxed
=> Starting year 2029 pension: $1000 bring to Japan, and somehow make it clear that the $5000 is NOT pension but rather savings thus paying taxes
=> only on the $1000 brought for year 2029 (now being a non-permanent resident for tax purposes or something ya).

Is my understanding clear? As mud?

Thanks so much…don’t want any nasty surprises 5 years from now…

=> mark corrections of year in that line...

Yes, in Year 6 - 2029 - you DO have to pay Japanese Taxes on the income in 2029, whether you remit it or not, and you can bring the $5000 from savings (2024 to 2028) completely tax free as savings.

Yes, in 2029, you become a permanent resident for tax purposes, and the income in 2029 is the taxable event for 2029...

It may be too late now, but it would have also been tax free if you had been able to transfer money in 2023, before moving to Japan in 2024... or maybe before you actually move in 2024...

If you plan to transfer funds in 2024, you should seek the advice of a professional just to make sure you don't fall into a tax trap.

Your Federal Pension is completely tax free in Japan. Article 18 - 2(a) Refers.

Your Social Security and other potential income / capital gains will be taxable in Japan, if any funds are remitted to Japan in the first 5 years, and then from the 6th year onwards, whether funds are remitted to Japan or not.

So, say that $1000 per year is actually $500 from Federal Pension and $500 from Social Security, ONLY the $500 from social security would be taxable in any year, and only if it exceeds the total Tax Free Allowance / Deductions...

Y480,000 for you
Y380,000 for you spouse, if you claim her as your dependent
Y1,100,000-ish for the Public Pension Deduction...
and maybe some other deductions based on your circumstances...

So you might get away tax free or very low tax in any year in any case, even if you remit funds every year...
You would need to run the numbers...

[solo7100]

Awesome info, thanks so much. Will be having a think about this and run the numbers.

Thanks again!