Hello! I'll (hopefully) be working remotely, part-time, for my U.S. company while pursuing a Master's in Japan starting in late September, and am wondering how taxes would work in this situation (more-so on the Japan side than the U.S.) and if my understanding is correct (see below)? Most advice I've found is for full-time employees on a Spousal Visa or PR status at larger companies, but I wasn't sure if my circumstances changed anything (student visa, company is just my boss and I).
I understand that on a Student Visa, I'll need to apply for "permission to engage in activities outside of the designated visa," (and get that approved first before anything), can't work more than 28 hours per week, and most likely need to register as an independent contractor (would greatly appreciate any advice on setting this up, though it sounds like I just need to fill out some paperwork at the ward office). My main question is: how do taxes work for me and my employer? I believe the Japan-U.S. Tax Treaty means I pay taxes in Japan and then use that receipt for a Foreign Tax Credit in the U.S., but I'd appreciate confirmation this is correct. Any simplified advice or insights would also be greatly appreciated since I'm not very familiar with taxes/finances in general!
- Based on my research it sounds like it will be easiest for my employer if I bill them as a self-employed/independent contractor. Is that accurate, and if so has anything changed finance/tax-law wise that would make this post inaccurate (including the linked comment)? Also just want to confirm if billing as an independent contractor is likely my best route; does only being part-time change anything there?
- My understanding is that as an independent contractor my current employer/company would not have to pay any taxes related to my employment and that responsibility would fall onto me. Is that correct? I'm incredibly grateful for this opportunity and want to make this as easy as possible for them.
- Can I still get bonuses as an independent contractor? Does that impact the tax-situation at all? (Christmas/New Year's is our busy season so my employer usually sends out a bonus then)
- Is this tax calculator (fairly) accurate? Ignoring the current weak yen (hoping it will come back up, and want to be prepared if it does), and assuming a rate of ¥100:$1 USD I'm conservatively guesstimating an annual income of (roughly) ¥3.1 million, meaning a little less than ¥1 million will go to taxes. So I'll need to save about a third of my paycheck for taxes, correct? I know this is putting the cart way before the horse but I really want to figure out my budget. Does remitting the money to Japan impact this, and if so how? (I.e. would I be charged any additional taxes on top of income taxes in transferring the money here?)
- Does anyone have any recommendations for English-speaking accountants who could ensure I'm doing everything properly on the Japan-side? I'll be in the Kansai area but if they take remote clients, and are familiar with Japanese tax laws, I'm comfortable working with an accountant based anywhere.
- Is there anything else you think I should be aware of/taking into consideration?
I know this was a really long post, so thank you in advance for any insights you could give on any of the above questions! Also new to Reddit, and kinda new to navigating taxes/finances so please bear with me if I've gotten anything wrong 😅
by Business-Pass4672
