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Second Year Taxes for Americans and Beyond

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This tax guide outlines the process of filing taxes for second-year and above 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.

After your first year, the filing process becomes significantly easier if you have not made any money in the US. To avoid paying the filing fees, the paper forms are pretty simple, but if you are filing close to the deadline or just want to avoid the post office, check out the services below:

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

Timeline

You have an automatic 2-month extension to file your taxes since you live abroad. That means that you must file by June 15th.

NOTE: Please understand that if you owe money to the IRS you are responsible for paying your taxes by APRIL 15TH otherwise you will incur late fees and the amount owed will accrue interest. The automatic 2-month extension is only for filing, not paying.


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 2555-EZ

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 currently covered under a parent or spouse’s health plan, you may not need to file this form, so check with them or contact the IRS. If you are claiming independent and not covered by insurance in the US, then you will need to submit this along with your taxes to avoid the penalty. We encourage you to read the form instructions carefully because they can be slightly confusing depending on your situation.
  • If you were residing in Japan and pass the physical presence test for the year 2014, you are eligible for the exemption. Fill out the sheet as follows:
    • Complete all of the necessary information at the top (Name, SSN, etc)
    • Skip Part I
    • In Part II check no in both boxes
    • On line 8:
      • Section A: Your name as it appears on form 1040
      • Section B: Your Social Security Number
      • Section C: Your exemption type will be “C” if you lived in Japan for the year 2014 and were present for 330 days.
      • Section D: Check here to show you were present for the full year.
    • On lines 9 and below: Complete them for your dependents and/or spouse in the same manner as above.
    • If lived in the US for any part of 2014 you may be eligible for an exemption on the basis of a coverage lapse. Please refer to the instructions for Form 8965 to investigate your options.

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 (line 18 on 2555-EZ) on line 21 in parentheses, which means it is a negative value. This amount will be subtracted in 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!