Thursday, February 28, 2008

Time to File 2008

It's time for U.S. residents residing in Japan to file their income tax forms. If you've filed before, you should have already been mailed a packet with forms. If you haven't gotten those forms, you can find them on-line or contact the U.S. Embassy. Remember, even if you don't have to pay, you have to file. If you don't, it can complicate your tax situation when you return to the United States.

I strongly recommend you keep a copy of each year's completed forms around so you can use them to guide you next year. The forms rarely change or change very little and you can pretty much follow what you did last year to speed up the process of filing greatly.

A few key points to keep in mind this year:
  • You must use the average exchange rate when converting your yen earnings to dollars rather than a current daily rate. The average as of January 2008 was 107.82 yen to the dollar according to the U.S. Federal Reserve.
  • The amount of money you can earn and still be exempt from paying U.S. taxes was raised to $85,700 (as compared to $82,400 last year).
  • It's a good idea to send the I.R.S. copies of your Japanese tax statements rather than the original forms with a Japanese stamp. The I.R.S. does not require the originals and you may need them for filing your income taxes in Japan and for immigration. Japanese authorities often will not accept photocopies of these forms.
  • Don't forget to include any taxable interest on savings accounts you may have back in the United States. If you aren't sent the forms, see if you can access them via on-line banking or have someone at home send them to you.
  • You must file separate 2555-EZ Foreign Earned Income Exclusion forms for each member of your household who worked in 2007 who earned less than $85,700.
  • Though the U.S. deadline for filing this year is April 17, the deadline for those residing abroad is automatically extended to June 15, so you have a bit longer to file.
I posted more exhaustively on this last year if you'd like more information. And again, I issue the disclaimer that I'm not a tax expert and only offering a layman's viewpoint. You should check the facts with the I.R.S.


ターナー said...

Good call - I just printed out the forms after dealing with the Japanese pensions and health insurance.

nanboring said...

Thanks for this post! I always procrastinate until the very last minute. Hopefully that'll change this year.

BTW I recently started reading your blog, and I'm really enjoying it.

CMUwriter said...

I took mine to H&R Block. Ten days and $100 later, I had my refund sitting in my savings account.