- July 12, 2023
- Posted by: Aki Kojima
- Category: Individual & Self-Employed
Hello, dear readers! If you’re a freelancer in Japan, today’s topic is especially for you. We’re diving into the often misunderstood realm of reporting secondary income for tax purposes. Let’s get started!
The Common Misconception
You might have stumbled upon articles or forums online suggesting that if you’re an employee of a single company, incomes equal to or under 200,000 yen don’t need to be declared. This might sound like a relief, but hold on a minute!
Freelancers, You’re Different!
Unlike regular employees who receive their salary from just one source, freelancers often have multiple income streams. This means that even if you earn a small amount, say 5,000 yen for an interview, it’s essential to declare it. This rule applies even if this income isn’t from your primary freelancing job.
Why the Difference?
The reason behind this distinction is simple. Regular employees don’t need to declare secondary incomes because their primary salary comes from a single source, and their other payments (if any) total up to 200,000 yen or less. However, with their varied income sources, freelancers don’t fall into this category.
A Note on Resident Tax
It’s crucial to remember that the non-declaration rule for regular employees is strictly for income tax. This rule doesn’t extend to resident tax. So, even if you’ve heard otherwise, always declare all your incomes correctly to avoid potential pitfalls.
For freelancers, the bottom line is clear: Declare every income, no matter how small! Staying informed and diligent about your tax obligations will ensure you’re on the right side of the law and can continue your freelancing journey without any hitches.
Remember, always consult with a tax professional or refer to official guidelines when in doubt. Stay informed, stay compliant, and be happy freelancing!
*Note: A YouTube short script inspires this blog post. You can check out our YouTube channel for a visual representation of this topic.*