GaijinTax.Com - An English Teacher's Guide To Reducing Tax

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GaijinTax.Com
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GaijinTax.Com - An English Teacher's Guide To Reducing Tax

Unread post by GaijinTax.Com » Fri Feb 27, 2009 2:21 pm

Hey all,
I've made an online tax guide which shows how to claim business expenses and fill out your tax forms.

http://GaijinTax.Com

It has English versions of all the tax documents, examples, and a step by step guide which you can follow. It's free of course :) No registration or sign ups required.

Cheers,
Emil

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Re: GaijinTax.Com - An English Teacher's Guide To Reducing Tax

Unread post by Mogura » Sat Feb 28, 2009 8:22 pm

Had a look at your Web site...

A gensenchoshuhyo is issued by an employer for income earned as a result of employment (i.e., you are in the employ of a company, and not the owner/operator of said company).

How can you claim business-related expenses to reduce tax liability on employment-earned income? I don't think it can be done or is allowed for that matter*.

My understanding is that you can claim expenses to reduce tax liability for income earned through business activities only (i.e., you are the owner/operator of a business, for example, a sole proprietorship)*.

*I am not 100% certain on these points, so if you or anyone has successfully claimed business expenses to reduce tax liability I'd like to hear about it.
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Re: GaijinTax.Com - An English Teacher's Guide To Reducing Tax

Unread post by GaijinTax.Com » Sun Mar 01, 2009 7:49 pm

You're right, you cannot claim business expenses on employment income. If you read a little more, you'll notice that the site explains how to include independent business income into your equation, and then deduct expenses such as rent etc.

The step by step guide shows you how to fill out the forms: http://gaijintax.com/step-by-step-guide ... ses-front/

Any other questions, please ask :)

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Re: GaijinTax.Com - An English Teacher's Guide To Reducing Tax

Unread post by quato » Mon Mar 02, 2009 1:08 pm

GaijinTax.Com wrote:You're right, you cannot claim business expenses on employment income. If you read a little more, you'll notice that the site explains how to include independent business income into your equation, and then deduct expenses such as rent etc.

The step by step guide shows you how to fill out the forms: http://gaijintax.com/step-by-step-guide ... ses-front/

Any other questions, please ask :)
Thanks- great site! Is there a rule of thumb as to how much you should earn from you private-teaching side business in order to be able to claim expenses like rent, etc... Obviously teaching one private lesson a year for 3000 yen and then claiming 2million yen in expenses would look bad. 8)

The point on your site about reducing your kokumin kenko hoken (national health insurance) is great- mine was only 3000/month when I had no income.

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Re: GaijinTax.Com - An English Teacher's Guide To Reducing Tax

Unread post by GaijinTax.Com » Mon Mar 02, 2009 11:29 pm

Thanks for the kind words, Quato.

There is no "rule of thumb" as such, as long as you can explain and justify your expenses. If you do one lesson, once per week at a cafe, then you cannot really justify your rent as being an expense. Teaching from your home a few hours per day at even 500yen/hour, although cheap, does actually make your home also a place of business and thats a different story.

So you have to evaluate what expenses your independent business activities incur and go from there. But if its just going to be 3,000yen here and there, then it would most likely be included in "雑所得”、zatu-sho-toku, misc. income, rather than independent business.

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Re: GaijinTax.Com - An English Teacher's Guide To Reducing Tax

Unread post by ManyQs » Sat Jun 20, 2009 1:46 pm

I visited your website, GainjinTax.Com, and I did not see very much information about miscellaneous income. As one major player in the ESL field is paying their teachers under this system, and probably many others that I don't know about, I submit to you that you might want to update your website.

If you have any questions about deductions under this system, as many do, I can provide you with some very specific information that came directly from a tax official this year, as well as information that came from another tax official in another branch office that was very incorrect.

There seems to be a lot of problems related to deductions when you are paid miscellaneous income, even within the tax bureau itself. In my case, I got very lucky that a city official caught the mistake made by the last tax guy who did my calculations for me. That's right, folks, I managed to get a tax bureau fella to do the form for me. I don't mean one of those temp staff members they hire for a few months a year. I mean a full-time tax bureau official. He did it again this year, too. And got it right this time. But it's not easy to get that kind of service.

To move on, I am also interested in knowing how many members here have been paid under the miscellaneous income bracket, because I can't seem to find any solid information on the guidelines companies must follow in choosing whether to pay income as employment or miscellaneous, if there are any guidelines.

Well, I suppose there must be guidelines, but as with many matters of the law in Japan I suspect government officials don't really enforce them. Or even care.

So what's your view of this, GaijinTax.Com?

Oh yes, one more thing: it's zatsu (miscellany) shotoku (income) -- two words. At least, that's what I thought and my little IC dictionary seems to agree.
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Re: GaijinTax.Com - An English Teacher's Guide To Reducing Tax

Unread post by Tall Tall Tree » Sat Jun 20, 2009 4:09 pm

ManyQs wrote:as well as information that came from another tax official in another branch office that was very incorrect.
Here in the States, they've done studies where they've called the Internal Revenue Service's help line something like 26 different times, asked the same question to 26 different operators, and got 26 different wrong answers. That's one of the reasons I'm for the FairTax in that other thread; the complexity of the current system is just beyond the capacity of mortals.

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Re: GaijinTax.Com - An English Teacher's Guide To Reducing Tax

Unread post by Mogura » Thu Jul 09, 2009 7:53 pm

Tall Tall Tree wrote:That's one of the reasons I'm for the FairTax in that other thread; the complexity of the current system is just beyond the capacity of mortals.
That complexity keeps a lot of CPAs and attorneys employed. I don't think their lobbying groups will push for a simplified or fair tax code...
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Re: GaijinTax.Com - An English Teacher's Guide To Reducing Tax

Unread post by Tall Tall Tree » Sat Jul 11, 2009 2:35 pm

Mogura wrote:That complexity keeps a lot of CPAs and attorneys employed. I don't think their lobbying groups will push for a simplified or fair tax code...
Well, according to some of the quotes in the FairTax books, many CPAs don't mind the idea so much because they can make more money handling investments than doing taxes, and the FairTax will encourage investment. But there are many lobbying groups against the FairTax, representing various companies who have weasled in ridiculous tax breaks or benefits into the current code. One of the reasons getting it passed is going to be an uphill battle is that there are a lot of powerful people and companies with a vested interest in the status quo, at the expense of you and me.

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Re: GaijinTax.Com - An English Teacher's Guide To Reducing Tax

Unread post by Privileged » Thu Jul 16, 2009 2:35 am

Just wanted to post support for what a great site this is. Besides getting 130,000 back (a good 1/2 month's salary for me) my residence tax is considerably lower too (80,000). Basically everything this site advised worked great for me. I suppose some risk, I was paranoid about getting audited, not because I believe I filed incorrectly or dishonestly but simply because an audit in Japan would fucking suck but in the end it worked out wonderfully and I feel I paid much more appropriate and accurate taxes than I did in previous years. Gaitax.com, I owe you a beer. Cheers!

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Re: GaijinTax.Com - An English Teacher's Guide To Reducing T

Unread post by stone » Sun Oct 24, 2010 7:03 pm

The forms seem to be for 2008. Are there any plans to provide updated versions for 2009 and 2010 ?? -- I know they are virtually the same with only a few changes - but still...

Also, here is what I still don't get ... if someone could spell it out for, I'd appreciate it a lot!

Let's say we have someone making a full-time salary of Y6,000,000 which roughly translates into Y500,000 per month gross and Y400,000 per month net of taxes and other deductions. And, there is no other source of income - just that salary. No moonlighting or private lessons.

Now, if one follows the instructions on gaijintax.com and files a second amended tax return along with claims for deductions - business expenses for a theoretical 'consulting' company with so far zero revenues but lots of expenses - if done right, will that get me back a chunk of income taxes that were initally withheld at source? Or, will it get me a big fat 'rejection' or ' no difference at all'?

Sorry, I'm not the sharpest knife in the drawer and I'm hoping someone can give me a straight answer.

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Re: GaijinTax.Com - An English Teacher's Guide To Reducing T

Unread post by jon » Mon Oct 25, 2010 8:58 am

It would help if you just went the extra few yards - came up with a business name and - you know - just a small amount of income from somewhere. Don't want to embarass people, do we?

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Re: GaijinTax.Com - An English Teacher's Guide To Reducing T

Unread post by stone » Mon Oct 25, 2010 9:30 am

Okay. I get you. So let's say I add the following:

Claim a sole proprietorship (kojin jigyo - nothing fancy) for writing - and declare a minimal amount from freelance activities - say, Y50,000 ... but a buttload of expenses related to the research and set up of my part-time endeavors (what can I say? This writer is a poor businessman!). Will those 'buttload of expenses' only be deductible from the taxed owed on my measly Y50,000 income or will it also apply to the tax withheld at source from my 'main job'?

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Re: GaijinTax.Com - An English Teacher's Guide To Reducing T

Unread post by jon » Tue Oct 26, 2010 12:52 am

stone wrote:Okay. I get you. So let's say I add the following:

Claim a sole proprietorship (kojin jigyo - nothing fancy) for writing - and declare a minimal amount from freelance activities - say, Y50,000 ... but a buttload of expenses related to the research and set up of my part-time endeavors (what can I say? This writer is a poor businessman!). Will those 'buttload of expenses' only be deductible from the taxed owed on my measly Y50,000 income or will it also apply to the tax withheld at source from my 'main job'?
I was thinking of a measly Y1,000,000 or so. In this case you can claim against rental costs, phone costs and many other costs besides and end up quite legitimately paying no tax on the extra income and even eat into your salaried tax too.

In theory, I guess you could try to do what you say. In practice a) unless your salaried income is really high what would be the point in trying? Tax is so low anyway, particularly if you are in your first year you will get most of it back. b) If you did try, it could be looked at at as taking the piss. They might want to look at whether or not you had made any investments that look like you are really trying to build up a business or not. Best way to save money is make some first.

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Re: GaijinTax.Com - An English Teacher's Guide To Reducing T

Unread post by Mogura » Tue Oct 26, 2010 6:39 pm

IIRC, income from employment and income from business revenue (sales) are recorded in two different places on the tax forms. You can use business-related expenses to decrease tax liability on business-derived income, but you cannot use business-related expenses to further decrease tax liability on employment-derived income. For that to occur, you would need to get the employer that issued you a gensenchoushuhyou to instead issue you a shiharaichousho and somehow "cancel" the gensenchoushuhyou (not likely to happen)...
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Re: GaijinTax.Com - An English Teacher's Guide To Reducing T

Unread post by jon » Tue Oct 26, 2010 9:58 pm

I stand corrected. I asked the wife, and she said sure (assuming she knew because she does our taxes!??). I'm not currently on a salary. However, at the time when I was getting money from both salary (at Nova) and self-employment I believe she had a conversation with them which altered our status. I'll check with her.

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Re: GaijinTax.Com - An English Teacher's Guide To Reducing T

Unread post by stone » Sun Nov 07, 2010 1:27 pm

jon wrote:
stone wrote:Okay. I get you. So let's say I add the following:

Claim a sole proprietorship (kojin jigyo - nothing fancy) for writing - and declare a minimal amount from freelance activities - say, Y50,000 ... but a buttload of expenses related to the research and set up of my part-time endeavors (what can I say? This writer is a poor businessman!). Will those 'buttload of expenses' only be deductible from the taxed owed on my measly Y50,000 income or will it also apply to the tax withheld at source from my 'main job'?
I was thinking of a measly Y1,000,000 or so. In this case you can claim against rental costs, phone costs and many other costs besides and end up quite legitimately paying no tax on the extra income and even eat into your salaried tax too.

In theory, I guess you could try to do what you say. In practice a) unless your salaried income is really high what would be the point in trying? Tax is so low anyway, particularly if you are in your first year you will get most of it back. b) If you did try, it could be looked at at as taking the piss. They might want to look at whether or not you had made any investments that look like you are really trying to build up a business or not. Best way to save money is make some first.
According to a colleague at work, he somehow manages to get back almost all of his withheld tax every Spring. And, that's what I'd love to be able to do.

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Re: GaijinTax.Com - An English Teacher's Guide To Reducing T

Unread post by redbar » Sun Nov 07, 2010 6:17 pm

stone wrote:
jon wrote:
stone wrote:Okay. I get you. So let's say I add the following:

Claim a sole proprietorship (kojin jigyo - nothing fancy) for writing - and declare a minimal amount from freelance activities - say, Y50,000 ... but a buttload of expenses related to the research and set up of my part-time endeavors (what can I say? This writer is a poor businessman!). Will those 'buttload of expenses' only be deductible from the taxed owed on my measly Y50,000 income or will it also apply to the tax withheld at source from my 'main job'?
I was thinking of a measly Y1,000,000 or so. In this case you can claim against rental costs, phone costs and many other costs besides and end up quite legitimately paying no tax on the extra income and even eat into your salaried tax too.

In theory, I guess you could try to do what you say. In practice a) unless your salaried income is really high what would be the point in trying? Tax is so low anyway, particularly if you are in your first year you will get most of it back. b) If you did try, it could be looked at at as taking the piss. They might want to look at whether or not you had made any investments that look like you are really trying to build up a business or not. Best way to save money is make some first.
According to a colleague at work, he somehow manages to get back almost all of his withheld tax every Spring. And, that's what I'd love to be able to do.

I've done it before, but I wonder how many years in a row you can claim a big loss on your side business? Say you declare 1mil in sales but 1.5mil in costs for 10 years in a row- would the gov't believe you are that much of a failure?

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Re: GaijinTax.Com - An English Teacher's Guide To Reducing T

Unread post by stone » Sun Nov 07, 2010 7:14 pm

redbar wrote:.....

I've done it before, but I wonder how many years in a row you can claim a big loss on your side business? Say you declare 1mil in sales but 1.5mil in costs for 10 years in a row- would the gov't believe you are that much of a failure?
I don't think the average tax bureaucrat thinks too deeply about the welfare of an English-teaching gaijin and if pressed, would probably hold a low opinion of us. They are probably more focused on whether the forms that we submit each year have their t's crossed and i's dotted.

I'd hate to think the next ten years of my life would consist of making the same measly coin.

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Re: GaijinTax.Com - An English Teacher's Guide To Reducing T

Unread post by jon » Tue Nov 09, 2010 12:10 am

From what I understand it can take quite a while before the tax man gets around to auditing you. However, when your turn does come around the scrutiny is extremely thorough. The penalties are not that high for locals, although significant. However, after that your credit is sunk. You won't get a loan anywhere.

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Re: GaijinTax.Com - An English Teacher's Guide To Reducing T

Unread post by angryboy » Tue Nov 09, 2010 8:58 pm

jon wrote:. However, after that your credit is sunk. You won't get a loan anywhere.


Mother fuckers won`t even give me a credit card now so can`t hurt me!
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Re: GaijinTax.Com - An English Teacher's Guide To Reducing T

Unread post by stone » Fri Feb 04, 2011 10:06 pm

GaijinTax.Com wrote:Hey all,
I've made an online tax guide which shows how to claim business expenses and fill out your tax forms.

http://GaijinTax.Com

It has English versions of all the tax documents, examples, and a step by step guide which you can follow. It's free of course :) No registration or sign ups required.

Cheers,
Emil
Hey - the forms on your site are still for 2007.

Do you plan to update it to FY2009?
:wnw:

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