Types of Spending which reduces Personal Taxes | Income Deduction Japan

Even if no one wants to break the law, many people want to explore how to reduce it within the limits of the law.

There is also a way to consider “whether it will cost”.
But for the same amount spent, there are ways to reduce taxes that reflect more personal circumstances.

After understanding the basic idea of ​​tax reduction, let’s check 14 specific examples.

Why it reduces Tax?

Think about the tax implications.
The tax here is the income tax.

Income tax is levied on income.
For example, consider business income.
If you’re writing a manga, you can draw materials, pens, etc., from there.

If you think so wildly,

“Income from manga – the cost of art materials” = profit

It can be said.

You will be taxed on this profit. But besides that, you have to adjust for taxes. Because we need to
“consider personal circumstances.”

For example, let’s say your house is destroyed in a disaster.
This loss is not directly related to writing manga.
Also, if you lose your home, it may not be enough to pay less taxes for that year.

From this way of thinking, we have technically named it “income deduction” and have prepared a calculation method that lowers the tax on profits.


16 specific examples

Considering losses such as disasters: miscellaneous loss deduction

You can use this deduction if you have suffered damage due to disaster, theft, or embezzlement.
Recently, the number of disaster cases has increased. It will make adjustments for events that you can’t do anything with your own will.

It does not include fraud or extortion.

I spent a lot of medical expenses: medical expense deduction

You can deduct those expenses from your income tax calculation if you incur medical expenses.
This can include spending for yourself and family members who share your livelihood.

In addition, if it is compensated by insurance money, it cannot be deducted.

Health promotion deduction: self-medication

As well as spending on outcomes, such as health care, prevention efforts can also be included in the amount that can be deducted from the income calculation.

It is optional with medical expense deductions.
For example, it includes the cost of buying cold medicine and treating yourself.

However, since it is an extension of preventive medicine, it is subject to conditions such as annual health checkups, so be careful.

If you paid social insurance premiums: a deduction for social insurance premiums

You can also deduct social insurance premiums.

You can include expenses for yourself and your spouse and other relatives who share your livelihood.
Social insurance premiums are tax-deductible, although they are difficult to save.

Expenditure for future savings: Small business mutual aid contribution deduction

You can deduct it from your income tax calculation if you spend on future savings such as small business mutual aid.
It is thought that it has the same characteristics as social insurance premiums.
So you can pull.

Life Insurance Expenses: Life Insurance Premium Deductible

Amounts such as life insurance premiums can also be deducted from the income tax calculation.
It is a content that everyone uses frequently.

However, it is less compulsory than social insurance for salaried workers.
Also, the amount you can withdraw is not that big.
Some argue that it complicates the tax system.

Nevertheless, it is an opinion that deductions should be deducted in the same way as social insurance premiums.
There was talk of a review at the 2023 Tax Commission.
In the case of the Kishida administration, which is criticized for raising the salaryman tax, there is a possibility that this system will be considered.

Expenditure on earthquake insurance: a deduction for earthquake insurance premiums

Earthquake insurance premiums are also deductible as necessary to prepare for emergencies.

Contribution expenditure: Contribution deduction

Donations can also be deducted from income tax calculations.
Hometown tax is also included here, so it is famous.

Before hometown tax, donations to national and prefectural governments, NPO corporations, public interest corporations, etc., are included.

Expenditures for people with disabilities: disability deduction

If you are disabled or have a family member disabled, your income will be considered.
270,000 yen per person with disabilities and 400,000 yen per person with particular disabilities.

The difference between persons with disabilities and persons with special disabilities is the degree.

Singles 1: Widow (Husband) Deduction

In the case of a widow (husband), 270,000 yen can be deducted.
If you are a single parent, you no longer apply here.

You must be divorced or widowed, have not remarried, have dependents, and have a total income of 5,000,000 yen or less.
In addition, legally, if there is a common-law relationship, it is said that it will not be covered.

Singles 2: Single Parent Exemption

As a general understanding, this applies to cases where children live together under the deduction for widows (husbands).
In this case, the deduction amount will be 350,000 yen.

Special for Academics: Working Student Deduction

If you are working on your studies, you can withdraw 270,000 yen.

For Couples 1: Spousal Deduction

This applies if you have a spouse. The special exemption for spouses is applied when the total annual income of the spouse exceeds 480,000 yen and does not exceed 1,330,000 yen.

For couples 2: Special exemption for spouses

This applies when the spouse’s income of the spouse exemption is low. The special spousal exemption applies when the spouse’s income is 480,000 yen or less.

Expenditures for those who support: a deduction for dependents

Applies to dependents with children.
For example, if you have a 16-year-old child, you can draw 380,000 yen per person.
From 19 to 23 years old, you can get 630,000 yen.

Under 16 years old was applicable before, too, but was not targeted because it became double with child allowance.
I don’t think it’s okay if you don’t say that and pull me out.

Living Expenses: Basic Deduction

480,000 yen can be subtracted as expenses for all people to live.
I don’t think I can live on 480,000 yen, but I will subtract 480,000 yen as a tax-free portion.

It was raised from 380,000 yen in 2020.
This ensures fairness to business people to respond to criticism that only office workers are given preferential treatment.

control within the limits of the law

Certain expenses are legally tax deductible.
Understand these things and put them in control of your taxes.

Leave a Reply

[eac_elementor_tmpl id="10108"]