Final Tax return just for dividends

[FlamingWombat]

Even though this is a tax question, I feel like a dummy, so I'm posting this here.

So, I am an American PR holder who has their 年末調整 done every year by their workplace. A few years ago I started investing (US ETFs through Interactive Brokers), and my dividends always fell below the 200000 yen threshold so I only declared my dividends for residence tax (by going directly to the municipal tax office).

This year, thanks to a few more shares and the exchange rate, by dividends will likely cross the 200000 yen barrier. So, that means I guess I need to do my first 確定申告. My questions as a first-timer:

1) If you do your own final tax return after your company has already done the year-end adjustment, can you just fill in the "new" info (i.e. my dividends) without messing with all the salary/insurance/home loan deduction type of info that was submitted with the year-end adjustment? Like the final tax supplements that info, not overrides it?

2) If I do the final tax return, the municipal/resident tax will be accounted for in that process and I won't also have to declare at the municipal tax office?

3) Is there any major benefit (tax rate wise or even just ease of filling out the forms ) for going with the separate or aggregate method?

Thanks in advance.

[sutebayashi]

1) when doing a final tax return, you will need to provide details from your year end adjustment slip, and then the extra things you want to declare - dividends in your case.

2) yes, a submitting a final tax return should have you covered for municipal taxes too

3) from memory, unless you have low income, going with the separate taxation option should be better, assuming your marginal tax rate is more than 20.315%.

The other thing you might want to check though, is whether IB does tax withholding at the source for Japan tax already on those dividends - I was recently suffering confusion about this myself, as from 2023 I have a “non-withholding” taxable account with Monex. But the “non-withholding” part applies only with respect to capital gains, I learned. That is, with Monex, US withholding tax has been applied, as well as 20.315% Japan withholding tax for the dividends I get from US stocks in my taxable account.

So with respect to dividends and my final tax return, my purpose is going to be to report the foreign tax I paid on those dividends already so as to claim back the double-taxation part. If IB is already doing the Japan tax withholding on your dividends too, this might be more what you want to do.

[adamu]

I don't know anything about US taxes, except how to claim them back on dividends as a non-US citizen . Just responding to the points asked:

1) when doing a final tax return, you will need to provide details from your year end adjustment slip, and then the extra things you want to declare - dividends in your case.

If you do it online and have your 源泉徴収票, it walks you through adding all the relevant information from the right places.

3) Is there any major benefit (tax rate wise or even just ease of filling out the forms ) for going with the separate or aggregate method?

It depends if your national income tax rate is lower than the 15% rate for separate taxation. You can try them both and see which one works out better before submitting the final return. Bear in mind you have to use the same method for residence tax too, so if you choose aggregate for national tax, residence tax will be charged at 10% instead of the 5% for separate taxation.

You can also use this simulator which will give you the residence tax results as well as the national tax:
https://kaikei7.com/shotokuzei_juuminzei_keisan/

Also, a tax return is for the previous calendar year's income, so if you get the income this year, you'll need to do the tax return next year.
Also also, if you are also paying US taxes on the same income, you might be able to claim the foreign tax deduction (I guess you are already doing that in the opposite direction, though).

[FlamingWombat]

1) when doing a final tax return, you will need to provide details from your year end adjustment slip, and then the extra things you want to declare - dividends in your case.

...The other thing you might want to check though, is whether IB does tax withholding at the source for Japan tax already on those dividends.

Thanks for the reply.

So I shouldn't need to re-input deductions, etc. That will be easier.

And my US ETFs haven't had tax withheld on either end. Even with IB becoming IBSJ (fully based in Japan) halfway through the year, it's still not a tokitei account and we have to do our own reporting (or so we were told - the yearly tax reports aren't available yet.)

EDIT: So now I realize that my dividends post-IB changeover did have tax withheld, so now I have to figure out if I need to do a final tax return because the total is over 200000 yen, or just the residents tax because the remaining untaxed amount (he pre-changeover IB) is under 200000. I'm going to ask this in a separate post because now it's become a totally different question.