Simple Strategy for US Citizen

[captainspoke]

I've never used an accountant, so I cannot offer any advice there.

An alternative might be to ask at your tax office (tho it is now the very busy season). Explain what has happened and they would very probably work with you on corrected returns. You'd probably need someone from their kokusaika to be in this loop.

The other alternative is to file properly this time and let those past years slide for now and see if they contact you about possible taxes for those past years. If they don't, then as each year passes you could breathe more freely. After a few years (if not five) I think this would effectively be behind you (at little/no cost to you, either accountant fees, or back payments).

If your accountant does the corrected returns, or if the tax office catches/notices you or you volunteer that your past returns need correcting (and they do the corrections), you're going to be out some back taxes and interest, and going with the accountant, +¥90,000 on top of that. Personally, I'd skip the accountant and go direct to the tax office. Or maybe even gamble on not being called out on past years.

But again, for which path to choose, this is your choice.

[ichiokuen]

Thanks again Captain,

Doing a little googling on the accountant question, on their responsibility to file correctly, it turns out that, no, accountants are not responsible for filing your returns correctly, the final responsibility lies on the filer(correct term?). So one may ask, why use an accountant then and how can an accountant keep their customers? For me, (for US taxes) all the details(paperwork) required about a sole proprietorship, and doing the streamlined procedure (for FBAR), since I didn't file for many years, was intimidating and I didn't want to mess it up. I guess the only way an accountant can keep (repeat) customers is to not make mistakes.

I like your second alternative, I will probably just try that. My reasoning is that since the J tax office does not provide any details about how to declare foreign earned income, there was no reason (or way) for me to file for them. I just read through the little booklet they send at tax time and there is not one word in there about how to declare foreign earned income!

Have nice weekend!

[captainspoke]

...
My reasoning is that since the J tax office does not provide any details about how to declare foreign earned income, there was no reason (or way) for me to file for them. I just read through the little booklet they send at tax time and there is not one word in there about how to declare foreign earned income!
...

So if it's not there (how to do it), why are you doing it now (this year)?

Make your choices and take your chances, but I wouldn't bet on that line of reasoning if they do call you on it.

[ichiokuen]

Whoah, you're right!
I know I'm kicking a dead horse here, but, do you have any idea why they choose to leave out specific instructions on how to do it?

[TokyoWart]

My reasoning is that since the J tax office does not provide any details about how to declare foreign earned income, there was no reason (or way) for me to file for them. I just read through the little booklet they send at tax time and there is not one word in there about how to declare foreign earned income!

Just weighing in based on personal, painful experience. The tax office will say that nothing in the instructions for declaring income limit it to domestic (Japanese) income. The same is true for dividends, capital gains or any investment income. The exceptions come in how you can claim some tax deductions or credits for foreign taxes paid on that income and that foreign income does not have to be reported for those who are not considered "residents" per the tax office. Just like the tax accountant (税理士) doesn't take responsibiity for his mistake, if at any time the tax office has given you incorrect advice or failed to tell you that income needed to be reported they will take no responsibility for their error.

[ichiokuen]

they will take no responsibility for their error.

Typical. I will admit though that I've had nothing but fast friendly service down at my local tax reporting office.

[captainspoke]

I stumbled across this discussion on a different forum--it might be of interest here. I'm not sure of the "separation" method mentioned there, I'm just pointing to this as food for thought.

https://jref.com/forum/threads/japanese ... ock.60533/

[ichiokuen]

You da man! That's exactly what Google wouldn't find for me! I'm losing confidence in Google every time I do a search.

Thanks so much, seperation sounds good to me! Do you mean you never used that method before?

[ichiokuen]

Doing my Japan taxes now and was wondering if my US brokerage held qualified and non qualified dividends and other distributions(partnership distributions) are taxed at different rates and under different names in Japan? Or do they all get lumped under 配当所得?

Thanks for your help!

[TokyoWart]

They are all the same. If you paid foreign taxes on dividends (e.g. to France for Novartis or to the UK for GSK) the Japanese tax office should account for those taxes before they apply their additional 10% tax.