Pension and the Final Tax Return in Japan: I Got Back 10,000 to 30,000 Yen

Do you think that people living on a pension do not need to file a final tax return?

I thought so too.

But I tried it, and every year 10,000 to 30,000 yen came back to me.

My conclusion: even if you do not understand it, you can take your receipts to the town office and hand them in. After that, the town office will teach you.

Here is my own experience, and why I can say that. In Japan this filing is called kakutei shinkoku, a final tax return.

I Thought a Person on a Pension Did Not Have to File

To be honest, at first I thought that a person living on a pension did not need to file a final tax return.

You hear that a lot. And there really are cases where the system itself says no filing is needed.

When I was waiting my turn at the town office, the person next to me was asking the same question.

“I hear that people on a pension do not have to file. What is the truth about that?”

I could not hear the answer from the staff member. But I learned that everyone has the same doubt.

To give my conclusion first, “not required” and “better not to do it” are two different things.

So at first I also thought it was something I did not have to do. It looked like trouble, and I figured the amount would not be much anyway.

But in Fact I File Every Year Now

Now I file a final tax return every year.

The reason is simple. I tried it, and money came back.

This is how much came back over the last few years.

• The year before last: about 30,000 yen (the deduction for social insurance premiums was large, because of the national pension for my family)
• Last year: about 30,000 yen (same reason)
• This year: about 10,000 yen (I paid less in social insurance premiums)

The amount differs by year, but money did come back.

Why the Amount Was Different

I noticed it later, but there was a reason for the gap in the amounts.

Last year and the year before, I was paying a lot for the national pension of my family.

That made the deduction for social insurance premiums bigger, and the money that came back was bigger too.

This year that burden was smaller, so the refund settled at around 10,000 yen.

The more things that count as deductions, the more the returned amount changes.

The Medical Expense Deduction Was Not Only for 100,000 Yen and Above

About the medical expense deduction, I thought you could not claim it unless your medical bills reached 100,000 yen.

I believed that myself. But when I actually checked, it was different.

The Trap in the Medical Expense Deduction

• Many people think you cannot claim it unless the amount is 100,000 yen or more
• In fact, if your total income is under 2,000,000 yen, you can claim the deduction once your medical expenses go over 5 percent of your income
• Example: if you receive 2,000,000 yen of pension a year, your income for tax is about 900,000 yen (after subtracting the deduction for public pension income of 1,100,000 yen)
• So you can claim medical expenses over 45,000 yen (900,000 yen x 5 percent)
• In my case the amount did not reach 100,000 yen, but I could claim the deduction

I do not decide on my own that it is too small to count. I just hand it in and see. I think that is enough.

What I Take to the Town Office

At the time of the final tax return, this is what I carry to the town office.

• Receipts (medical expenses, all of them together, including the ones for my family)
• The withholding slip that comes with the pension statement
• The withholding slip for the corporate pension
• The earthquake insurance certificate
• The certificate of the amount paid for the national health insurance tax
• The papers related to nursing care insurance
• The certificate for the life insurance premium deduction
• The bankbook (as proof of the automatic payments)

I show all of it.

When I am not sure whether something is related, I take everything. The person at the town office decides what can be used and what cannot.

The one who judges is not me. It is the office.

No Need to File Is Not the Same as Better Not to File

I think it is true that under the system there are cases where you do not need to file.

But not needing to file does not mean it is better not to file.

If I do not do it, it is 0 yen. If I do it, there is a chance that 10,000 to 30,000 yen comes back.

That gap is bigger than it looks.

If I Do Not Understand It, I Hand It In as It Is

The way of doing it was surprisingly simple.

I gather the receipts and add them up roughly.

When the filing season comes, the forms are ready at the town office.

I write only the parts I understand, and I leave the parts I do not understand as they are.

If I take it in that state, they teach me one item at a time.

I hear all kinds of stories about how public offices treat people, but at my own town office they never made an unpleasant face, and they were very kind. Honestly, I feel there is no need to worry that much.

Looking back, I have gotten through my life by asking the experts.

• When my parent died, I went to the town office and said, “Please teach me everything.”
• For the registration of the inheritance I asked a judicial scrivener, and I collected the papers myself
• For the final tax return too, if I take it to the town office they teach me

What I do not understand, I can ask about. That alone makes life a lot easier.

Next Year My Medical Expense Deduction Will Be Bigger

By the way, next year my medical expenses will go well over 400,000 yen because of implant treatment.

In that case, how much comes back?

I plan to write again next year about what actually happens when I file it.

What I Did: I Just Handed It In at the Town Office

For a person on a pension, the final tax return does not have to be thought of as difficult.

• Collect the receipts (medical expenses, payments for the national pension, and so on)
• Get the form at the town office during the filing season (February to March)
• Write only the parts you understand, and take it in with the rest left blank
• The person at the town office fills it in with you

With this, if money comes back to you, it is 10,000 to 30,000 yen. There is no reason not to do it.

While you think it is troublesome, or that it has nothing to do with you, it is 0 yen. If you do it, it is tens of thousands of yen.

Do it or do not do it. That is all it is.

What I Wrote About Procedures After a Death and Inheritance

• When My Parent Died, I Had No Idea Where to Start — So I Asked the Office to Tell Me Everything
• Kokumin Nenkin Tsuinou: I Paid 600,000 Yen of Back Pension for My Child
• Inheritance Tax in Japan: I Had Land and Still Did Not Have to File