Tax return/nenmatsu chosei and declaring healthcare costs

[KCLenny]

Hi all, new to the whole game of declaring all my various costs for the year so have been keeping receipts and track of everything.
I recently got given my tax papers from my company and I asked my boss if/how I go about claiming my healthcare costs on them. She made a call to the accountant who told her that we can’t do it and that I have to do it myself through an end of year tax return.
I thought what my company gave me was that but oh well. She said I should go to the tax office and do it there.

My question is, what exactly do I need to do? I’m quite confident my healthcare costs go over ¥100,000 for the year, as do my wife’s. We both have chronic health conditions so need regular medicine (one of which is branded and has no generic version available…I’ve asked and checked myself, which totals just over ¥3000 a month just for the one tablet a day…amongst about 6 other tablets we need).
I’ve kept every receipt and piece of paper the various doctors/hospitals/clinics/pharmacists have given me.
Is it just a case of taking my (massive) folder of paperwork down to a tax office and filling out a million forms? Or is there something else I need to prepare/take into account (like somethings aren’t declarable?)

Thanks in advance everyone.

[beanhead]

You need to give the receipts along with the form mentioned below:
Statement of deduction for medical expenses

https://www.nta.go.jp/english/taxes/ind ... 020/24.pdf

My understanding is that you only get some tax relief for the medical spending above 100,000 during the year. So it is probably worth adding up what you spent. You can claim for transportation to hospitals, clinics, if you use a train or taxi.
This amount is for the household, not the individual.

[captainspoke]

...
I’ve kept every receipt and piece of paper the various doctors/hospitals/clinics/pharmacists have given me.
Is it just a case of taking my (massive) folder of paperwork down to a tax office and filling out a million forms? Or is there something else I need to prepare/take into account (like somethings aren’t declarable?)

Thanks in advance everyone.

I keep a spreadsheet thru the year, and log my costs as I go. So, columns and rows. (Will not make 100k this year, but my sheet was started just in case.)

First column is an extra--I number each item/bill as I log it. I organize it by date, so in the second column is the date of each item, from earliest to latest. Third column is the name of the hospital/clinic. Fourth column is the amount, and for this one, total at the bottom. Also, tho not recently, I've added rows for being reimbursed, or an insurance payment. I've put these credit amounts in the fifth column, totaled at the bottom, and these two totals are then resolved there.

I turn this kind of sheet in with my tax return (I do mine at the tax office with their oversight and help). It is a supplementary document. --> There is a form at the tax office to fill out in order to make this claim, but you don't have to repeat everything, just personal details like name/address, and then the total amount.

Do this kind of spreadsheet before you go to the tax office. If you just show up with a bundle of (disorganized?) receipts you'll be wasting time for many people. Tax season starts in February, so get started on this now, and either update it as it happens, or finish it after the first of the year.

You do not need to submit your receipts with your return, just your itemized list. But you do need to keep your receipts on the off chance that you'll be checked (audited). I think three years, tho five would be safer. (I think a standard audit is three, but they can go back five if they see the need to.)

**

True medical expenses are claimable. But if you've been hospitalized, some possible expenses there are not. You cannot claim the cost of a private room. You cannot claim the cost of a 'pajama set'/towels. If there's a separate 'shower set' (toothpaste, shampoo, soap), this is also not claimable. Theses are not medical treatments, only things that make your life easier. I've never done it, but I've read that you can claim transport costs to and from the docs/hospitals.

**

You definitely need to 'pretty up' the spreadsheet with your personal ID info. Add a header with name, address, phone, the tax year that it is for, your My Number, your tax ID number, and paginate it if it's long (p. 1/3, p. 2/3, p. 3/3), same header info on each page.

I'm not sure what you tax office will be like, but for me, it was not unusual to blow a day on the tax office visit. When tax season starts, mine is extremely busy, the line starts well before it opens on a given day. It's only with the pandemic that the last visits I've been able to make a reservation, but even then it's just an arrival time, and it still has taken 2-3 hours to get thru to the end. (Lots of stations, take a number and wait, get called, do another part of it, move to the next stage, etc.) Because of this, it's pretty important to have your spreadsheet done and ready when you go.

You may be able to do your tax filing on your phone. Many people do. In that case there is a way to mail your supporting docs to the tax office. I've never done it by phone, so someone else may offer that advice.

Good luck!

[Tkydon]

The Nenmatsu Chosei that your company gave you is the more simple document that allows them to resolve the amount of Tax they have withheld from you salary throughout the year with the reality of your tax situation; number of dependents and Insurance Premiums. Anything more complicated has to be filed in the Kakutei Shinkoku by March 14.

You can only claim your out-of-pocket expenses; the payments you made, and not for any payments made by the Health Insurance Company, or reimbursed to you by the Health Insurance Company.

Is your wife listed as your dependent, for whom you receive the Spouse Allowance on your Year End Tax Certificate Gensenchoushuhyo, and included under your Health Insurance coverage?
If so, you can claim the tax relief on her out-of-pocket expenses too.

https://www.nta.go.jp/english/taxes/ind ... x_2020.htm

(Last year's, as this year's guide is not available yet)
Page 39 refers

"You are eligible for this deduction if the medical expenses paid in 2020 for you, your spouse or relatives living in the
same household as you (see page 27) exceed a certain amount.
*This deduction for medical expenses or the special treatment of the deduction for medical expenses by the
self-medication tax system (see page 41) is applicable either at the choice of the taxpayer.
Select one of them and perform calculations in the corresponding columns for calculations."


The deduction amount is the actual amount paid for medical or dental expenses, minus the less of 5% of total income or Y100.000, with a ceiling of Y2,000,000.

List up all medical costs from all the receipts in a Spreadsheet and calculate the total.

Deduct the less of 5% of Total Salary or Y100,000 , then you can claim the tax back on the remainder, the Deduction Amount.

Deduction Amount x Marginal Tax Rate / (1-Marginal Tax Rate) = Tax Credit.

You then need to file this Deduction Amount in the Kakutei Shinkoku to receive the Tax Credit, and you need to keep the receipts for 5 years, in case they decide to audit you.

[adamu]

I'm also working out this process.

For you I think the process will look like:

1) Do the nenmatsu chousei with your employer for now, without claiming the medical deduction.
2) Submit a tax return in Feburary, claiming the deduction. You can use the withholding statement your employer will generate, so you don't have to re-enter the information from the nenmatsu chousei.

There is an official spreadsheet you can use to add up the expenses called 医療費集計フォーム
It's linked from the top-right here: https://www.keisan.nta.go.jp/kyoutu/ky/sm/top

There is also some first-class acting to guide you through the process in this video:
https://www.nta.go.jp/publication/webta ... tv_wb.html

---

The wiki article on nenmatsu chousei is a bit bare-bones for now, but it at least confirms what your employer told you: you can't use it to claim the medical deduction, and also need to submit a tax return next year. I'm considering starting the medical deduction article, but I'll probably wait until next year after I have successful experience claiming it fist. https://retirewiki.jp/wiki/End_of_year_tax_adjustment

[Tkydon]

I do it every year. I take along my Gensenchoshuhyo and the Spreadsheet and the huge wad of receipts. At least at my Tax Office, they give it cursory glance, (help me to) enter the values (for me) in Form B. They keep the copy of Gensenchoshuhyo, but give me back the spreadsheet and wad of receipts and tell me to keep them for 5 years in case they want to look at them...

If this is all you have to claim, and the amount after deducting the less of 5% of Total Salary or Y100,000 is very small, then the Marginal Tax refund and reduction in next year's Residential Taxes might not justify the time spent... On the other hand, I find that all the doctor's bills and medicine costs soon add up to quite a pile...

[KCLenny]

Hi all,
Thanks for the all the help and advice.
I’ve been calculating everything up and it appears that I’ve wildly overestimated how much I spent. So far my total expenses come to about 56,000. That isn’t including a chiropractor I go to (I have to use my health insurance for it but I don’t have any receipts for it so should I go and ask for something for it?).
And I haven’t started my wife’s expenses yet. But I’m still confident that with my wife’s added on top our total will be over 100,000. Does that still meet a threshold or does it have to be 100,000 each?

[Tkydon]

100,000 per household

[Wales4rugbyWC23]

Sorry if this might go off on a slight tangent, but are PCR tests an accepted medical expense? I have spent a small fortune on them with a trip to the UK in October and going back in December. So much so, that I think just with these PCR tests I might go over the 100,000 yen annual additional health expenditure minimum.

[beanhead]

Sorry if this might go off on a slight tangent, but are PCR tests an accepted medical expense? I have spent a small fortune on them with a trip to the UK in October and going back in December. So much so, that I think just with these PCR tests I might go over the 100,000 yen annual additional health expenditure minimum.

https://www.nta.go.jp/taxes/shiraberu/t ... 122_qa.htm

Q5.
No unless you had symptoms and the tests were done on 'doctor's orders'.