RetireJapan

Hello everyone, I have a question concerning taxes regarding the use of tokutei broker accounts.

I know that it is not necessary to file any taxes with the tokutei broker account in Japan as it is done automatically, but as I am a US citizen, I am wondering if it is 1.) necessary to declare my tokutei account on my FBAR form and 2.) if it is necessary declare any dividends paid from the account on my US tax form. I have only Japanese dividend stocks in my tokutei account, no ETFs.

Thank you in advance for your help.

1.) necessary to declare my tokutei account on my FBAR form

If your total non-US accounts (bank + tokutei brokerage account + anything else) ever exceeds $10,000 during the calendar year then you need to include every account on the FBAR (including if they were closed during the year). The FBAR filing is pretty easy.

2.) if it is necessary declare any dividends paid from the account on my US tax form.

Even if you did not meet the threshold for filing an FBAR you need to declare your Japanese dividends on your US tax return. Don't forget to count the 20.315% tax you paid as an entry for foreign taxes paid. There's a good chance this won't actually increase your US tax liability but it does need to be reported. Depending on the total amount of your accounts you might also have to include Form 8938 "Statement of Specified Foreign Financial Assets" which kind of repeats what you enter on the FBAR but links it to entries on your 1040 form.