確定申告の基本 — 給与所得・副業・控除

A final tax return (kakutei shinkoku) is the procedure of calculating income and the corresponding income tax for one year (January 1 to December 31) and declaring/paying tax to the tax office. The filing period is in principle limited to approximately one month, from February 16 to March 15 of the following year. Missing this deadline may result in additional tax for non-filing and delinquent tax penalties.

Most company employees do not need to file because their employer performs year-end adjustment. However, filing is mandatory in the following cases: (1) those whose salary income exceeds 20 million yen, (2) those with non-salary income (side jobs, stock transfer gains, real estate income, etc.) exceeding 200,000 yen, (3) those receiving salary from two or more employers, and (4) sole proprietors and freelancers.

Even when filing is not mandatory, "refund filing" can recover tax. Common examples: medical expense deduction when annual medical costs exceed 100,000 yen, housing loan tax credit in the first year (years 2 onward are handled via year-end adjustment), donation deduction (when furusato nozei is not handled via the One-Stop exception), and people who retired mid-year and did not re-employ.

Income deductions reduce taxable income, lowering tax burden. (1) Medical expense deduction: covers amounts exceeding 100,000 yen (or 5% of total income, whichever is lower) in annual out-of-pocket medical costs, capped at 2 million yen. (2) Furusato nozei: donation amount minus 2,000 yen is deducted from income tax and resident tax. (3) iDeCo (Individual-type Defined Contribution Pension): the full contribution amount is deductible under the small enterprise mutual aid premium deduction.

(4) Housing loan tax credit (formally: special deduction for housing borrowings): 0.7% of the year-end housing loan balance is deducted directly from income tax (a tax credit) for up to 13 years. The first year always requires a final tax return. (5) Life insurance premium deduction: each of three categories — general, nursing/medical, and individual pension — allows up to 40,000 yen (total cap 120,000 yen).

There are three submission methods. (1) e-Tax (electronic filing): use a My Number Card with an IC card reader, or smartphone authentication via Myna Portal integration. Available 24 hours, some attached documents can be omitted, refunds are faster (typically about 3 weeks). (2) Paper submission to the tax office in person or by mail: traditional method, refund processing may take 1-2 months. (3) Hiring a tax accountant: incurs a fee but is accurate.

Sole proprietors (including freelancers) can choose between blue (aoiro) and white (shiroiro) returns. The blue return requires submitting an "Application for Approval of Blue Return for Income Tax" to the tax office in advance (in principle within 2 months of starting business, or by March 15 of the year you wish to apply it), and keeping account books with double-entry bookkeeping. This grants a special deduction of up to 650,000 yen (when meeting requirements such as e-Tax use and electronic bookkeeping preservation). Even simplified bookkeeping yields a 100,000 yen deduction.

The white return requires no prior notification and uses simplified bookkeeping, but offers no special deduction and does not allow loss carryover (the blue return allows 3 years of loss carryover). Considering tax-saving effects, the blue return is overwhelmingly advantageous for those running ongoing businesses.

Income tax calculated via the final tax return must in principle be paid by March 15. Payment methods include: (1) transfer payment (automatic debit from bank account, usually in late April), (2) direct payment via e-Tax, (3) internet banking, (4) credit card payment, (5) convenience store payment (under 300,000 yen, requires QR code), and (6) cash payment at the tax office or financial institution.