# Taxes?



## Frasek

I need help on the amount of taxes I should be expecting to pay.

My salary will be between 200,000 to 250,000 yen a month. I'll be in the Kobe (Kansai) area. 

Also, i'm a U.S. citizen, so any insight on what I'll also be paying the IRS & what tax forms I'll need to file?

Thanks!


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## larabell

Who's paying you? In general, US citizens are taxed on all their income even if they're living outside the US. But... if you read the part about "income" very carefully, you could make a case for not including money you receive from a company that has no ties to the US at all (ie: if it's a Japanese company as opposed to a subsidiary of a US company). I relied on that interpretation myself over a decade ago but don't take my word because I'm not a tax attorney (or any sort of attorney, for that matter).

But in your case, it doesn't really matter. You're not even over the exclusion limit. If you live outside the contry for at least a year, the first $95K of your income can be excluded. But the bummer is that you have to file a return in order to claim the exclusion. Check out Form 2555 and Publication 54. All that's on the IRS web site so you really should be looking there for details.

Japan's income tax is progressive, like the US, so the marginal percentage increases as your salary increases. Your marginal rate should be 20% but before that there's all sorts of adjustments and deductions so you may end up paying no more than 10% in total taxes. You can find a guide to Japanese taxes at the following link:

http://www.nta.go.jp/tetsuzuki/shinkoku/shotoku/tebiki2011/pdf/43.pdf

Take your annual salary and run through the calculations. It's a lot easier than the IRS forms. You can probably get a rough idea with only a few minutes work. Besides that, there will be a "resident's tax" levied by your local municipality that generally amounts to a few percent of your total reported income (after all the deductions). But that's based on the previous year's income so for your first year here, your resident's tax will be zero.


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## Frasek

Interesting. It's a Japanese company employing me & the salary is way below $91,000 usd.

So, are you saying I'll have to file & pay taxes to the IRS, but will get them all back in a tax return? Or will i just not have to pay them at all?

Thanks!


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## larabell

Frasek said:


> So, are you saying I'll have to file & pay taxes to the IRS, but will get them all back in a tax return? Or will i just not have to pay them at all?


If you make more than the minimum amount required for filing, you'll need to file in order to claim the exclusion. You almost certainly will but at your income level, the bottom line will most likely be $0 (assuming you don't have any Stateside income from investments, etc). If that's the case, there's no reason to pay anything during the year and your employer certainly isn't going to withhold US taxes. But the risk is that if your tax is significantly more then $0, the IRS could fine you for not having paid enough tax over the course of the year.

Now... the calculations can get strange if you move around the middle of the year as opposed to moving close to the end of the year. Also, you don't qualify for the exclusion until you've been out of the country for a certain period of time so you may have to apply for a filing extension until you've qualified. Again, I refer you to the official IRS publications, all of which are available online.


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## expatriotically

Frasek said:


> Interesting. It's a Japanese company employing me & the salary is way below $91,000 usd.
> 
> So, are you saying I'll have to file & pay taxes to the IRS, but will get them all back in a tax return? Or will i just not have to pay them at all?
> 
> Thanks!


Frasek,

Don't overlook your US filing obligations for foreign bank account reporting which includes 1040b to report the existence of a foreign bank account and possibly FBAR filing if your overseas account reaches $10k US.


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## jojo

We have a tax section now Expat Forum For Expats, For Moving Overseas And For Jobs Abroad - Announcements in Forum : Spain Expat Forum for Expats Living in Spain Might be worth a look???

Jo xxx


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