Here is a basic overview of what you need for your taxes. But first some notes:
A) if you filed form 4868 (application for extension of time to file) last spring, then your extension is almost up.
B) This year, Americans will get a little tax kickback thanks to Uncle Sam. If you file before Oct. 15th, you can still claim your rebate.
C) A disclaimer: Though I am offering tax information, I am not a tax professional and can’t take responsibility if there is a problem with your taxes. You will be preparing your own returns. That said, I am also following my own advice so if you get in trouble with the IRS, I probably will as well.
Let’s get started.
First, you will need to gather your supporting documents. This means proof of your income:
* W-2, if you worked in the US
* H19 Gensenchoshuhyo if you worked in Japan last year.
* special forms (like 1099) that your bank or loan providers mail you– these might show the amount of interest you paid on student loans, any income you received from stock dividends, the interest from your savings account, etc.
It’s helpful, but not necessary, to have a copy of your tax return from last year. Most people don’t see too many changes from year to year, so your old form might remind you of income sources or other special things you’d otherwise forget about.
I also find it helpful to make a Word document each year that lists all of my income sources and how much so that I just have to look at one paper and not a bunch of forms.
Next, you will need forms. Go to the IRS website and find the list of PDF publications. Or just click this link: http://www.irs.gov/formspubs/lists/0,,id=97817,00.html
Assuming you have already filed for your extension (using either form 4868 or form 2350)
You will now need to download AT LEAST these PDFs:
2007 f1040
2007 i1040
2007 i1040gi
2007 f2555ez
2007 i2555ez
The forms should be listed in order of number. The naming convention is simple: the year first, then f (for “form”) or “i” (for “instructions”) then the number.
“gi” refers to “general instructions” and “ez” is the “easy” or simplified version of a form. Because we are excluding foreign income, we have to file the regular 1040 (not 1040ez or 1040A). But we can use the ez version of the 2555.
Summary / Guide to Commonly-Used Forms for JETs
1040 — the basic tax return.
2350 — First years file this form or 4868 in April to get an extension of time to file. You CAN’T file your 1040 in April or you will not have been in Japan long enough to exclude your Japanese income.
2555 — This is the form that lets you exclude your Japanese income.
4868 — This is a form that will give you until mid August to file. File it in or the 2350 in April. It’s really short and easy to complete. The hardest part is that it asks you to estimate how much tax you’ll owe. That’s a bit tough.
8802 — You should already have filed this form when you arrived in Japan or before. When you file it, the IRS will send you a letter which you give to your supervisor. That letter gets you out of paying JP income taxes.
8822 — Change of Address form. You should have changed your address to your Japanese address already. According to the IRS, simply filing a form with your new address is not acceptable. You need to formally fill out the very simple 8822 and mail it in.
You will need to convert your salary to USD. The official way to do this is to find the exchange rate on your payday and then add all of the converted sums up.
Use the exchange rate prevailing when you receive, pay, or accrue the item. If there is more than one exchange rate, use the one that most properly reflects your income. You can generally get exchange rates from banks and U.S. Embassies. — IRS, “Foreign Currency and Currency Exchange Rates”
This site is useful for that: http://www.oanda.com/convert/classic
However, I’ve already figured this and you are welcome to use my figures, provided the following conditions apply:
1. You got paid 300,000 yen each month from Jan 2007 to Dec 2007.
2. Your C.O. pays you on the 21st of each month OR the earliest prior day in the event that the 21st follows on a non-work day.
If that’s true, you made the equivalent of $30,625.97 in 2007.
The IRS allows you to round figures to the nearest dollar, but you have to do it consistently (i.e. everywhere) on the form.
