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First Year Taxes for Americans

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This tax guide outlines the process of filing taxes for first-year Americans only.

This process can become confusing and difficult, so if you find anything unclear in this article contact the YETI Team and we will do our best to clarify.

While this can be done alone, it might be less hassle for you to meet with a tax preparer or use an online filing service to receive your refund faster.

  • E-file:
  • Tax Preparers:
    • Please notify us of anyone that you have used and have had a good experience with.

Timelines

  • August Arrivals
    • ASAP: After being notified of your appointment, file Form 8802 as soon as you can to be eligible for the US/Japan tax treaty. This exempts you from paying your first two years of Japanese income tax.
    • August: File Form 8822 to notify the IRS of your foreign address.
    • Before April 15th: File Form 2350 to obtain an extension.
    • July/August: File Forms 1040 and 2555-EZ/2555 to complete your first year taxes.
  • April Arrivals
    • ASAP: After being notified of your appointment, file Form 8802 as soon as you can to be eligible for the US/Japan tax treaty. This exempts you from paying your first two years of Japanese income tax.
    • April: File form 8822 after moving to notify the IRS of your new residence.
    • April Year 2:
      • Option 1: If you do not meet the physical presence test by the April 15th deadline, you must file form 2350 for an extension.
      • Option 2: If you meet the test by the 15th file Forms 1040 and 2555(2555-EZ) to complete your first year taxes.


Forms & Instructions

What You Need

  • Any W-2 Statements that you have from the previous tax year.
  • Your foreign earned income statement(s).
    • You will get this from your employer. It should be a small rectangular sheet stating the amount in yen that you were paid along with deducted taxes and such.
    • This form is called GENSEN CHOUSHUU HYOU (げんせんちょうしゅうひょう/源泉徴収票).
  • Tuition statements like 1098-T.
  • Form 1099 if you have any self-earned money/interest earnings.
  • Form 1099-G for any state refunds that must be reported as income on your federal return.
  • Form 1098-E for qualifying student loan interest deductions. Use this worksheet to calculate your deduction.

Form 8802 – Pre-arrival

The [www.irs.gov/Individuals/International-Taxpayers/Form-8802,-Application-for-United-States-Residency-Certification---Additional-Certification-Requests Application for United States Residency Certification] will spare you from 2 years of Japanese income tax due to a tax treaty between Japan and the United States. After completing this application you will receive Form 6166. There is an $85 user fee for this document, so be sure to order multiple copies and keep a few of them in safe places.

Your employer will most likely ask for this form when you arrive, so keep it handy. If you already have your new foreign address it can be sent there.

Form 8822 – Upon Arrival

File your Change of Address form as soon as you have moved in at your new address.

Don’t forget to file another when you move again.

Form 2350 – Before Tax Deadline

Before April 15th approaches in your first year, you will most likely have not met the physical presence test. Fill out the following Application for Extension of Time to File U.S. Income Tax Return, making sure that you correctly fill out parts 1 and 4. The longest extension you will be granted is one month after you meet your physical presence test.

For example: You arrived on August 4th. You must be present in Japan for 330 days till August 3rd of the following year to qualify for the foreign earned income exclusion. You may request a tax extension up to 30 days after that date. In this case you would be able to ask for an extension till September 2nd of your second year.

NOTE: This form is NOT an extension for you to pay taxes. You should make sure to actually do your Forms 1040 and 2555 before you file your extension. Any tax that you owe must be paid with form 2350 otherwise you will be charged interest and fees on any unpaid taxes.

Forms 1040, 2555, 8965, Etc – After Meeting the Requirements

After you have been present in Japan for 12 consecutive months AND 330 days you may file your returns.


  • Form 8965 – Health Coverage Exemptions
    • Form 8965 and Instructions
    • This year is the first year that the Affordable Care Act penalties will be coming into effect. If you are filing as independent you must have maintained minimum essential coverage for the year of 2014 before arriving in Japan to avoid the penalties. If your parents or guardian will be claiming you as a dependent for the year of 2014, then you need not worry and don’t have to file Form 8965.
    • Filling out the form:
    • Enter your name and SSN at the top as it appears on your 1040.
    • Skip Part I
    • In Part II: Check both boxes as no.
    • In Part III: This is where things get complicated
        • Refer to healthcare.gov to understand what “minimum essential coverage” is. If you are covered for one day in a month, it does count as being covered for the whole month.
        • Refer to the instructions for different types of exemptions.
      • On line 8:
        • Section A: Your name as it appears on 1040
        • Section B: Your social security number
        • Section C: Your exemption type
          • Use “C” and check the boxes for the months of 2014 that you resided in Japan.
          • If you recently graduated from University and were covered then but had a lapse between the US and Japan, you may be able to use the short coverage exemption. For a period of less than 3 months you can use this. In section C the exemption type is “B” and you may check off up to two months where your coverage lapsed for exemption.
          • If you did have a coverage lapse that is not exempt follow the instructions and complete the remainder of the form.

  • Form 1040 – Individual Income Tax Return
    • Form 1040, Instructions, and Schedules
    • Include your Japanese income on line 7 with your other earnings. Afterward finish lines 8-20 as per the instructions.
    • Insert your income eligible for exclusion on line 21 in parentheses, which means it is a negative value. This amount will be subtracted in the following calculations.

Finish the rest of your form 1040 as per the instructions to figure out what you owe or overpaid.


Good luck doing your taxes! Please notify the YETI Team if you are aware of any changes in the tax code so we can update. Thanks!