RetireJapan

Hi all, apologies for the last minute questions but it seems my Furusato this year might be a little more complicated than last's.

I'm trying to use the simulator offered here to calculate my maximum donation amount. As usual it requires numbers that I won't get until I receive my 源泉徴収 next year which is of course too late, so I'm doing my best to estimate them.

My particulars:

• I have 3 dependents (19, 23, 60 yr old).
• My salary this year was ~17.5m JPY
• I received ~5m JPY in stocks
• I do not have any non-compulsory insurances

The first question on the simulator asks me to input my 給与収入, and the picture refers to the 支払金額　section of the 給与・賞与 part of the 源泉徴収. However, looking at my 源泉 from last year, it only includes my base salary and not my stock. Am I right in thinking that the simulator is just not taking this situation into account, but I should be adding the price of the stocks at vest to my total (before-tax) income this year?

Secondly the simulator asks for my 社会保険料等の金額 - I see this is the total health, welfare, employee insurance and DC plan contributions I've made over the year, so I can calculate this myself without the 源泉. Anything I should be aware of?

Finally, I'm in a weird position where my base salary does not exceed 20m, but the stock addition does push me over the limit. Does this affect my ability to claim a tax refund on the 3 dependents?

Thank you so much!

Viralriver wrote: ↑Thu Dec 29, 2022 4:27 pm Hi all, apologies for the last minute questions but it seems my Furusato this year might be a little more complicated than last's.

I'm trying to use the simulator offered here to calculate my maximum donation amount. As usual it requires numbers that I won't get until I receive my 源泉徴収 next year which is of course too late, so I'm doing my best to estimate them.

My particulars:

• I have 3 dependents (19, 23, 60 yr old).
• My salary this year was ~17.5m JPY
• I received ~5m JPY in stocks
• I do not have any non-compulsory insurances

The first question on the simulator asks me to input my 給与収入, and the picture refers to the 支払金額　section of the 給与・賞与 part of the 源泉徴収. However, looking at my 源泉 from last year, it only includes my base salary and not my stock. Am I right in thinking that the simulator is just not taking this situation into account, but I should be adding the price of the stocks at vest to my total (before-tax) income this year?

Yes. Stock is not included in Nenmatsu Chosei, but is calculated as being included in your Gross Salary.

You should be able to get Gross Salary (ex-stock) and other values for the year to Nov from your Nov Payslip, and add in numbers for Dec, or for the year to Dec from your Dec Payslip, if you have already received it.

You have to add the Salary Value of the Stock @ Stock Price x TTM x # of Shares, which you have to file in Kakutei Shinkoku as Additional Salary from the same Employer. It is not included in Nenmatsu Chosei.

Viralriver wrote: ↑Thu Dec 29, 2022 4:27 pm
Secondly the simulator asks for my 社会保険料等の金額 - I see this is the total health, welfare, employee insurance and DC plan contributions I've made over the year, so I can calculate this myself without the 源泉. Anything I should be aware of?

It is not the total. It is the amount you will have calculated for the Nenmatsu Chosei submission. The total is capped.

Viralriver wrote: ↑Thu Dec 29, 2022 4:27 pm
Finally, I'm in a weird position where my base salary does not exceed 20m, but the stock addition does push me over the limit. Does this affect my ability to claim a tax refund on the 3 dependents?

Thank you so much!

Yes. This will have the effect of increasing your taxable salary, and therefore your Furusato Nozei Allowance.

Also, if you are claiming Medical Expenses, this will have the effect of decreasing your taxable salary, and therefore reducing your Furusato Nozei Allowance.

Tkydon wrote: ↑Thu Dec 29, 2022 4:48 pm

Viralriver wrote: ↑Thu Dec 29, 2022 4:27 pm.

Yes. Stock is not included in Nenmatsu Chosei.

You should be able to get Gross Salary and other values for the year to Nov from your Nov Payslip, and add in numbers for Dec, or for the year to Dec from your Dec Payslip, if you have already received it.

You have to add the Salary Value of the Stock @ Stock Price x TTM x # of Shares, which you have to file in Kakutei Shinkoku. It is not included in Nenmatsu Chosei.

Yep, I've got all those numbers for the payslips - so the value I put into the first box of the simulation should be total gross salary (as in payslip) + stock value. Stock value being that as you gave in the formula above.

Tkydon wrote: ↑Thu Dec 29, 2022 4:48 pm

Viralriver wrote: ↑Thu Dec 29, 2022 4:27 pm .

It is not the total. It is the amount you will have calculated for the Nenmatsu Chosei submission. The total is capped.

Are you sure? I did the calculation and adding in those payments add up exactly to what shows under 社会保険料等の金額　for my 2021 源泉.

Tkydon wrote: ↑Thu Dec 29, 2022 4:48 pm

Viralriver wrote: ↑Thu Dec 29, 2022 4:27 pm .

Yes.

To what extend does it affect my dependents? Is there any point in including them? And finally, can I trust that these simulators take this into account? It does seem that my "donatable amount" decreases as I put in my dependents even with a total salary of ~22.5m. So I guess this is either A) it affects it somewhat, or B) the simulators haven't taken it into account.

Thanks for the help!

Viralriver wrote: ↑Thu Dec 29, 2022 4:53 pm
Are you sure? I did the calculation and adding in those payments add up exactly to what shows under 社会保険料等の金額　for my 2021 源泉.

OK, in that case, you didn't reach the max.

Viralriver wrote: ↑Thu Dec 29, 2022 4:53 pm
To what extend does it affect my dependents? Is there any point in including them? And finally, can I trust that these simulators take this into account? It does seem that my "donatable amount" decreases as I put in my dependents even with a total salary of ~22.5m. So I guess this is either A) it affects it somewhat, or B) the simulators haven't taken it into account.

Thanks for the help!

Let me check in the morning.

The donatable amount will change as the amount of your Gross income + Stock (Salary Payment in Kind) in your highest Marginal Tax Bracket changes.
Taxable Salary Band - Tax Rates
18,000,000 to 39,999,000 - 40% Marginal Tax Rate + 0.84% Reconstruction Tax + 10% Residents' Taxes
The Furusato Nozei Allowance will also reduce the amounts in your highest Marginal Tax Bracket, etc... (Differential Equation)

Thank you really helpful! It seems two simulations I've done so far have given me more or less the same numbers, so I'll probably knock 20% off and then use that as my ballpark. Really hope (as always) that I haven't missed something and end up paying 200k for some fruit.

As an aside, a differential equation for calculating these numbers makes me hate the process even more.. No wonder so many Japanese people just give up with it.

Viralriver wrote: ↑Thu Dec 29, 2022 5:15 pm Thank you really helpful! It seems two simulations I've done so far have given me more or less the same numbers, so I'll probably knock 20% off and then use that as my ballpark. Really hope (as always) that I haven't missed something and end up paying 200k for some fruit.

As an aside, a differential equation for calculating these numbers makes me hate the process even more.. No wonder so many Japanese people just give up with it.

Agreed. If you have some sort of 'complications' to your income it is impossible to calculate with 100% confidence.
It seems to be made for the salaryman with basically a fixed income.

Tkydon wrote: ↑Thu Dec 29, 2022 5:10 pm Viralriver wrote: ↑Fri Dec 30, 2022 1:53 am

Are you sure? I did the calculation and adding in those payments add up exactly to what shows under 社会保険料等の金額　for my 2021 源泉.


OK, in that case, you didn't reach the max.

Your 社会保険料等の金額 likely comprises your health insurance payments (健康保険料), national company workers pension payments (厚生年金保険料), and employment insurance payments (雇用保険料).

The former two are capped for people with high salaries: for under 40s in Tokyo 健康保険料 maxes at 68,179円 a month (salaries over 1,355,000円 per month). 厚生年金保険料 maxes out at 59,475円 per month (salaries over 635,000円 per month).

Employment insurance 雇用保険料 does not have a cap: it's just a flat rate of 0.5% of salary each month (which increased from 0.3% a month from Oct 1st this year).

So it's likely you've reached the max for health & company pension payments - check your payslips, they should show 68,179円 & 59,475円 every month. But employment insurance payments should vary each year if your salary/stock income fluctuates.

Viralriver wrote: ↑Thu Dec 29, 2022 4:53 pm It does seem that my "donatable amount" decreases as I put in my dependents even with a total salary of ~22.5m. So I guess this is either A) it affects it somewhat, or B) the simulators haven't taken it into account.

Your dependent payments should be lowering your taxable income, so your furusato nozei limit should go down when you add these numbers into the calculation.

Viralriver wrote: ↑Thu Dec 29, 2022 4:27 pm Secondly the simulator asks for my 社会保険料等の金額 - I see this is the total health, welfare, employee insurance and DC plan contributions I've made over the year, so I can calculate this myself without the 源泉. Anything I should be aware of?

DC plan contributions should go under the 小規模企業共済等掛金控除 deduction, but putting them in the 社会保険料等の金額 box on the calculator might not affect the final result I guess.

@Viralriver
I’m in the same situation as you (but 2 dependents instead of 3) and have been using this simulator for many years, it’s always been in line with my calculations and, more importantly, with the final tax return results in March.
You should include your dependents, and it will reduce your total furusato nouzei amount.
I usually leave about 10,000¥ but up until now the simulator has never been wrong (as long as the yearly salaries/insurance total numbers were correct of course).

Tax Allowances

https://www.nta.go.jp/taxes/shiraberu/s ... ku/r04.htm

https://www.nta.go.jp/taxes/shiraberu/s ... df/050.pdf

See Pages 26-47

Personal Allowance Y480,000 starts to gradually reduce when the taxpayer's Gross Income exceeds Y24M to Y0 when Gross Income exceeds Y25M.
Less than Y24M = Y480,000
Less than Y24.5M = Y320,000
Less than Y25M = Y160,000
Over Y25M = 0

Spouse Allowance Y380,000 reduces if the spouse earns more than Y330,000, or the taxpayer's Gross Income exceeds Y11.2, to Y0 when Gross Income exceeds Y12.2M. See the Table on Page 34.

Dependent Allowance for dependents over 19 and under 23 is Y630,000.
Dependent Allowance for other dependents below 70 is Y380,000.


As TBS Said, taking the allowances and deductions will reduce your Taxable Income and so the amount of total tax, and the amount of Furusato Nozei Allowance...

TBS wrote: ↑Fri Dec 30, 2022 1:21 am Your 社会保険料等の金額 likely comprises your health insurance payments (健康保険料), national company workers pension payments (厚生年金保険料), and employment insurance payments (雇用保険料).

The former two are capped for people with high salaries: for under 40s in Tokyo 健康保険料 maxes at 68,179円 a month (salaries over 1,355,000円 per month). 厚生年金保険料 maxes out at 59,475円 per month (salaries over 635,000円 per month).

Employment insurance 雇用保険料 does not have a cap: it's just a flat rate of 0.5% of salary each month (which increased from 0.3% a month from Oct 1st this year).

So it's likely you've reached the max for health & company pension payments - check your payslips, they should show 68,179円 & 59,475円 every month. But employment insurance payments should vary each year if your salary/stock income fluctuates.

Yep exactly this - my calculation shows my 社会保険料等の金額 = 健康保険料 + 厚生年金保険料 + 雇用保険料 + contributions to my companies DC plan. As you said further down, this is actually part of the 小規模企業共済等掛金控除 calculation, but in terms of taxable income it doesn't seem to make a difference where I include it (at least in the simulators).

And you're correct - my welfare payments are 59,475 yen since October 2020 (56,730 yen before then),

TBS wrote: ↑Fri Dec 30, 2022 1:21 am Your dependent payments should be lowering your taxable income, so your furusato nozei limit should go down when you add these numbers into the calculation.

Yep, without them I have 760k, with them I have 610k. I just assumed it would have been a larger drop-off, and because it isn't I assume my tax reduction is lower than I might be thinking (potentially due to salary). Health is lower than that since my take home salary is below the cap (stocks are not reflected in my payslips). For that reason my employment insurance also does not fluctuate. I am right in assuming I can take into account my stocks as long as I declare them during the 確定申告 phase (which I know I need to do!)?

Kiro wrote: ↑Fri Dec 30, 2022 1:46 am @Viralriver
I’m in the same situation as you (but 2 dependents instead of 3) and have been using this simulator for many years, it’s always been in line with my calculations and, more importantly, with the final tax return results in March.
You should include your dependents, and it will reduce your total furusato nouzei amount.
I usually leave about 10,000¥ but up until now the simulator has never been wrong (as long as the yearly salaries/insurance total numbers were correct of course).

Thanks! I've always gone 20-25% lower just in case. Up till now I never included the 社会保険料等の金額 in the calculation so I guess that was for the best. Always worried there'll be something else I've missed out on haha. I'll go 15% lower this year and see how it goes .

Tkydon wrote: ↑Fri Dec 30, 2022 5:48 am Tax Allowances
...

Thanks for this! So it seems that at my salary-point the only reduction affected is spousal, but not the general reduction (48万円) or non-spousals.