Personal Finance Hacks in Japan

[RetireJapan]

If you have any straightforward personal finance hacks for people living in Japan, please add them to this thread

See the blog post for more details: https://www.retirejapan.com/blog/person ... n-japan-i/

[Chris D]

Purchasing coupon tickets for transportation (where a monthly pass wouldn't apply). Either in batches for regular travel directly from the ticket machine or individually from discount ticket shops at a slight mark-up. Different services have different systems but saving 25-35% on weekend or holiday travel is common.

[Ryuuku]

Just a question about the first "hack", about declaring life insurance, etc. in excess of 100,000 on the tax return. Are you sure that's legal? It sounds like tax fraud (claiming something which isn't true on your tax returns). I mean, I'm all for not paying as much in taxes if I don't have to, but I wouldn't want to risk having doubt cast upon me.

Also, on the topic of taxes, I'm signed up to the local 商工会 and on top of them being helpful in helping me connect with any local businesses, as well as them introducing other businesses to me, they also deal file my taxes for me. All I have to do is keep a decent record of income/outcome, pass it onto them, they sort it all out and get my taxes as low as legally possible. Also, it helps if I ever do get an audit of sorts, I can just say "they did it all for me, I have no idea."
Being a part of the 商工会 is only 12,000 for the year. Cheaper than paying a professional to do taxes, from what I could find in my area. Plus that aforementioned local business network, etc. on top of many other business-related services I could need.

tldr; Join the local 商工会 for help with everything business-related. Taxes included, at a fraction of the price of any rotary clubs, etc.

[goodandbadjapan]

Just a question about the first "hack", about declaring life insurance, etc. in excess of 100,000 on the tax return. Are you sure that's legal? It sounds like tax fraud (claiming something which isn't true on your tax returns). I mean, I'm all for not paying as much in taxes if I don't have to, but I wouldn't want to risk having doubt cast upon me.

I presume he only meant to claim it if it is true - i.e. don't forget to claim, not that you should just make stuff up to put on the form!

[RetireJapan]

Heh, you need paperwork/receipts for those, but they are all most definitely legal. And this year, for the first time, I may well have medical costs over 100,000 yen.

At least I'll get a blog post out of it

[RetireJapan]

Just a question about the first "hack", about declaring life insurance, etc. in excess of 100,000 on the tax return.

Just to be clear, these are three separate categories:

1. life/health insurance (your insurance company will send you a postcard to submit)
2. earthquake insurance (ditto)
3. health care expenses over 100,000 yen (anything under 100,000 yen doesn't count, only the amount over that: so if you had 104,000 yen's worth of expenses, 4,000 of them would be counted on your tax return)

[Ryuuku]

Thanks for the clarification, the way I read it was like "claim it, regardless". Perhaps it would be written as "don't forget to claim these things if the expenses exceed 100,000, with proof"

[RetireJapan]

Thanks for the clarification, the way I read it was like "claim it, regardless". Perhaps it would be written as "don't forget to claim these things if the expenses exceed 100,000, with proof"

Well, claim it if you have it. And only the health expenses need to be over 100,000 yen a year.

[ricardo]

Life insurance claims have a cap of ¥40k or ¥50k (depending on when you took out the policy) that you can deduct from your income. It’s not a lot, possibly saving you around ¥5,000 (depending on your ultimate top tax rate). Better than nothing, though.

Japanese life insurance companies only. Overseas policies don’t count. You have to include the postcard they send you with your tax return documents.

It’s not really a ‘hack’ - just part of the system.

The best one is the home loan tax refund, which is a 1% rebate of your outstanding loan balance (not a deduction from income, a deduction from tax owed). It renders your home loan almost interest-free or better (depending on your interest rate).

[captainspoke]

...
3. health care expenses over 100,000 yen (anything under 100,000 yen doesn't count, only the amount over that: so if you had 104,000 yen's worth of expenses, 4,000 of them would be counted on your tax return)

IIRC, you indicate the total health expenses on your return--you wouldn't want to list only ¥4000, which would then be ignored in the calculations there.

I've read that transport expenses to/from a hospital can be included in this total, and deducted, but have never listed any (we drive). Eg, taking a taxi back and forth.

Also, things you opt for that make your life more pleasant/easy, cannot be included. A hospital stay will often present you the option of buying/subscribing to a "pajama set". Besides a daily change of pajamas, you might also get towels, soap and shampoo, maybe toothpaste, and so on. This makes your hospitalized life easier, but it's not considered to be medically necessary. (And it may surprise some that while you get meals in a hospital, you have to provide your own tableware--chopsticks, spoons/forks.)

Same for a private room--you can opt for one, but that's your personal choice--not a medical necessity. That fee will come out of your pocket and cannot be listed as a health expense.