Filing Your Own Tax Return (Kakutei Shinkoku)

The Final Tax Return (確定申告 - Kakutei Shinkoku) is the process by which individuals in Japan report their annual income, calculate their tax liability, and settle their national income tax and special reconstruction income tax with the National Tax Agency (NTA).

Who Needs to File a Final Tax Return?

While many salaried employees have their taxes settled through their employer's year-end adjustment (Nenmatsu Chosei), you must file a Kakutei Shinkoku if, for example:

• You are self-employed or a freelancer (business income).
• You have rental income (real estate income).
• Your annual employment income exceeds ¥20 million.
• You receive employment income from only one employer, but your other miscellaneous income (excluding employment income) exceeds ¥200,000.
• You receive employment income from two or more employers (and your secondary employment income plus other miscellaneous income exceeds ¥200,000).
• You had significant capital gains (e.g., from selling property or stocks not subject to separate withholding tax).
• You left Japan mid-year without appointing a tax agent.
• You want to claim certain deductions or tax credits not covered by the year-end adjustment, such as:
  • Medical expense deduction.
  • First-year housing loan deduction.
  • Casualty loss deduction.
  • Donation deductions.
• You want to claim a refund for overpaid withholding tax (even if not mandatory to file).

Tax Year and Filing Period:

• Tax Year: January 1st to December 31st.
• Filing Period: Generally from February 16th to March 15th of the year following the tax year. (e.g., for income earned in 2024, the return is filed between Feb 16 and Mar 15, 2025).

Types of Tax Returns:

• White Return (白色申告 - Shiroiro Shinkoku): A simpler form of bookkeeping and tax return, generally for those with smaller business incomes or who don't opt for the blue return.
• Blue Return (青色申告 - Aoiro Shinkoku): Requires more detailed bookkeeping (double-entry is often preferred) but offers significant tax advantages, such as a special deduction (up to ¥550,000 or ¥650,000 if e-filing and meeting conditions), ability to carry forward losses, and other benefits. To file a blue return, you must submit an application to the tax office in advance.

How to File:

1. Gather Documents: Collect all necessary documents, such as income statements (e.g., Gensen Choshu Hyo from employers), receipts for expenses (if self-employed), certificates for deductions (insurance premiums, donations), My Number card information, etc.
2. Prepare the Return: You can prepare your tax return using:
   • The NTA's online "Tax Return Preparation Corner" (確定申告書等作成コーナー) on their website (primarily in Japanese).
   • Tax preparation software.
   • Manually filling out paper forms (available at tax offices or downloadable).
   • Hiring a tax accountant (税理士 - Zeirishi).
3. Submit the Return:
   • e-Tax: Japan's electronic tax filing system. Requires a My Number card and a card reader/compatible smartphone, or an e-Tax ID/password. E-filing often provides a slight extension to the deadline.
   • Mail: Send to the jurisdictional tax office.
   • In-Person: Submit at the jurisdictional tax office.
4. Pay Taxes Due: Any tax owed must be paid by the March 15th deadline. Payment can be made via bank transfer, credit card (through a designated NTA payment site, often with fees), convenience store (for smaller amounts), or at a financial institution.

Pre-Payment (Estimated Tax):

Self-employed individuals and others who expect their income tax liability for the year to exceed ¥150,000 may need to make estimated tax payments (予定納税 - Yotei Nozei) in July and November.

Filing a Kakutei Shinkoku can seem daunting, especially with language barriers, but it's a critical part of tax compliance for many individuals in Japan.