Filing taxes as both a foreign resident of Japan and an expatriate of your home country doesn’t need to be intimidating. There are plenty of online resources relating to filing taxes on foreign income, and your CO can be a great source of information about taxes in Japan. Paperwork required and money owed depend on a number of factors: your job position (ALT or CIR), home country and home state/province, and length of time on the JET Programme.
United States JETs
ALTs hailing from the United States do not pay any tax on income earned during their first two years on the JET Program. American CIRs, however, have income tax taken automatically from their monthly paycheck. American CIRs must also pay a “local inhabitant tax” to their municipalities once a year.
All Americans are still required to file a tax return form with the IRS and declare financial information like JET salary, outstanding student loans, and income earned in the United States. Even though you can claim a foreign earned income exclusion for your first two years in Japan, you must still file your taxes. Note that you must also pay taxes on any income you earned in the year leading up to JET.
The following timeline may be helpful for American JETs:
- Pre-departure: File Form 8802 to establish your status as a United States resident for tax purposes. (Note: NOT applicable to CIRs.)
- Upon arrival in Japan: File Forms 8822 and 4868. Form 8822 is a change-of-address form, and Form 4868 allows you to file your tax return form up to six months after the regular April 15 deadline.
- After 330 days in Japan: File Form 1040, your individual income tax return. Include Form 2555-EZ, your Foreign Earned Income Exclusion, and a photocopy of your 源泉徴収票, or gensen choshu hyo. This is a statement of your earnings in Japan and can be requested from your contracting organization. Those paying interest on student loans must also file Publication.
Kumamoto JET’s website has a fantastic step-by-step guide to filing federal taxes, complete with examples. For individual state taxes, consider asking other JETs from your state or consulting websites dedicated to expatriate taxes.
JETs from countries other than the United States will have income tax taken automatically from their monthly paycheck. They must also pay a “local inhabitant tax” to their municipalities once a year. Be sure to check with your supervisor as to how this is paid, either as an annual lump sum, or in monthly installments. JETs should check with their home country’s tax authority for more information on paperwork required and money owed.