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Re: Taxes for self-employed 2017/8/20 19:11
It's hard to really connect things when (as you said) so many variables are out there.

Yes, and since you're not even filing anything now, it's even more confusing for you because it's all up in the air. Once you get to a point where you know your income and assets, figuring out the correct forms and applying things to your situation become easier.

For your other questions, let me first say that I am NOT in ANY WAY an expert... or even knowledgeable... about taxes. Everything I know is based on the grudging research I did when I first had to file. So take this with a grain of salt.

And with this freelance job you're business is involved inside the U.S... would the situation be different? Since you have to two jobs in two different countries I guess you have to file for both and pay a lot more had you only one job which is teaching job, right?

First off, the embassy has nothing to do with taxes. You send your paperwork to a place in Austin (haha my hometown) if you don't owe anything, and to some other place if you do. It's all written on the tax forms themselves.

Second, having a job in the US only but living in Japan (i.e. online stuff or whatever), or a job in both countries, makes no difference to your US taxes, because of the fact that you're taxed regardless (the whole US and Eritrea thing). So it's moot. But in the case of earning income in the US, you can't include it in the 2555-EZ because it's US income, so you're liable to pay US income tax on it, whereas more than likely you wont owe any taxes on your Japan income. For freelance, you still obviously have to file, but it depends a bit on what kind of freelance. In my case, I still get the equivalent of a"W-2", so I just translate the applicable parts and submit the copies with my taxes each year. If it were all cash-based (like private teaching or something), then it's probably a different form. There's basically a form for everything, you just have to figure out which apply to you. And the more complicated the situation (own your own business in Japan, or freelancing, or cash, etc), the harder it can be to figure things out, hence why people hire accountants or CPA's to do their taxes for them.

As for "paying a lot more", not necessarily. Say your income in Japan is from your teaching job, so about $35,000. Then you made, say, $10,000 in freelance work in the US. By the time you add on any credits for things like student loans, dependents, etc. etc, you may not be liable for as much tax as you'd expect. There might even be (as someone mentioned above) a further "tax-credit" if you paid income tax on that freelance income in Japan, that you can apply so you aren't double taxed.

I can't give you any info about bitcoin, sorry.
by scarreddragon rate this post as useful

Re: Taxes for self-employed 2017/8/21 00:16
You asked about bitcoins. I frankly don't know about bit coins, but as you most likely will get paid in either USD or Yen, and most of your expenses (rent, daily expenses...) will be in either Yen or USD I don't see how bitcoin could help.

What seems to be currently the cheapest way how to transfer money internationally is a web page called TransferWise. You essentially pay your money in USD in, someone else in Japan wanted to transfer Yen to the US in USD, he takes your USD and your counterpart in Japan gives you his/her Yen instead. Plus TransferWise takes a small percentage for matching you two up.

by LikeBike rate this post as useful

Re: Taxes for self-employed 2017/8/21 03:36
Thank you for the answers, especially scarreddragon for having the patience to explain it to me. Furthermore, I think I now know some of the fundamental things to go about with tax involving both countries. So thanks again.

As you said, I definitely will have to figure this out when the cogs start turning and my departure to Japan comes close, I'm sure by then I will have everything figured out (assets. jobs etc.)

TransferWise seems really cool! The bases of the bitcoin question was simple to find a cheap(er) way to transfer money without getting hit with unneccessary fees, and you've answered the question of finding a cheap to way to do so, so thank you! I'll definitely read up on that since you've garnered my interest.
by boombaa1 rate this post as useful

Re: Taxes for self-employed 2017/8/21 08:29
There are quite a few ways of moving money around that are much cheaper than the regular banks/wire transfers/IMT. I mainly use OFX, but I had clients use worldremit. There are several different options available, but as always look at the overall fees/margin spread.
by JapanCustomTours rate this post as useful

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