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The US taxes its persons on a worldwide basis. So what you earn in Japan, even if it is taxed by the Japanese taxing authority, is subject to additional taxes by the IRS. This is true even if you have a "tax-free" account in Japan. However, you are entitled to a credit for taxes paid. In the alternative, there is a foreign income exclusion which will exempt a portion of your income from income taxes. While there is a US-Japan tax treaty, double taxation may still occur. It is critical to see if either the foreign tax exclusion or foreign tax credit will apply.
Along with FATCA and FBAR reporting, these are the specific Japanese IRS tax issues our team of tax attorneys, CPAs, and tax preparers assist our clients with:
In Japan, resident taxpayers are taxed on their worldwide income. However, non-resident taxpayers are taxed only on income received in Japan or on income arising in Japan.
If you are a Green Card holder you are subject to universal taxing jurisdiction on all your income, anywhere in the world. If you are a visa holder the rules are a bit more complicated about when universal taxing jurisdiction is triggered.
Citizens and residents living and working outside the U.S. may be entitled to a foreign earned income exclusion that reduces taxable income. In addition, you may exclude housing expenses, but with limits. There are limits and special rules about who qualifies for the exclusion, and we can help you understand if you qualify.
This is a non-refundable tax credit for income taxes paid to a foreign government as a result of foreign income tax withholdings. The foreign tax credit is available to anyone who either worked in a foreign country or has investment income from a foreign source. There are qualifying factors, and we can help you understand if you are eligible to tax advantage of this credit.
If you have made a mistake in previous IRS tax filings, or haven't filed at all, we can help. We are the nation's premier offshore disclosure firm. We have helped thousands of Chinese and others from around the globe properly disclose to the IRS. We can help you too. Call us at 888-727-8796 or email firstname.lastname@example.org.