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Foreign Tax Credit Anyone? 2017/7/17 16:54
I'm a American living in Japan. On my annual US tax returns I've always taken the Form 2555 Foreign Earned Income Exclusion. However, I wonder if in the future it might possibly be to my advantage to try taking the Form 1116 Foreign Tax Credit instead...

Has anyone out there taken the foreign tax credit on earned income from Japan using IRS Form 1116?

According to the IRS Instructions for Form 1116, it's OK to take a credit for income taxes "paid or accrued during your tax year to any foreign country... or any political subdivision (for example, city, state, or province) of the country or possession."

Looking at my employer-provided paycheck, I see the following two things being taken out, both of which I assume can be counted:

1). 所得税 (Shotokuzei, the Japanese National Tax, which includes an additional 2.1% assesment 復興特別所得税 called a "Special Income Tax for Reconstruction"

2). 住民税 (Juminzei, the Prefectural and Municipal Tax)

Any thoughts or advice on this??

by Leo (guest)  

Re: Foreign Tax Credit Anyone? 2017/7/22 16:13
Hello!

Do you pay US taxes from your income in Japan?


by Naoki (guest) rate this post as useful

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