Overpaid taxes can be recovered. It is just a matter of whether you know how.

"Tax saving" is not something special

When people hear the term "tax saving," many imagine it as something you consult a tax accountant about or something only the wealthy do.

But in reality, that is not the case.

Whether you are a salaryman or a part-time worker, there are many systems you can use just by knowing about them. And for many of them, the mechanism is such that "if you don't apply, you just keep paying."

The government will not tell you. Only those who find out for themselves and take action can receive the benefits.

Furusato Nozei (Hometown Tax) is a "transfer," not a "tax saving"

First, I would like to clarify a common misunderstanding.

Strictly speaking, Furusato Nozei is not a system to reduce taxes. It is a system that allows you to choose for yourself where to pay your taxes.

Normally, resident tax is automatically paid to the municipality where you live. Furusato Nozei is a mechanism that allows you to re-pay a portion of that to a "municipality you want to support," and you can receive return gifts by simply bearing the 2,000 yen difference.

Since you can receive return gifts such as rice, meat, seafood, and daily necessities with a net out-of-pocket expense of 2,000 yen, there is no reason not to use it.

However, to receive the deduction, you must complete the tax return or the one-stop exception procedure. Be careful, as the deduction will not be reflected if you just leave it as is.

The "various deductions" that are easily overlooked

Besides Furusato Nozei, there are many deductions that many people overlook.

1. Medical expense deduction

You can apply for this if the total medical expenses paid by your household in one year exceed 100,000 yen. This includes not only hospital consultation fees but also over-the-counter drugs purchased at pharmacies (self-medication tax system) and transportation costs for commuting to the hospital. Depending on whether you have a habit of saving receipts, it can make a difference of tens of thousands of yen.

2. Life insurance premium deduction

If you are enrolled in life insurance, nursing care medical insurance, or personal pension insurance, a portion of the premiums paid is deducted from your income. You can declare this during the year-end adjustment, but there are surprisingly many cases where people forget to submit the "deduction certificate" sent by the insurance company to their company.

3. Housing loan deduction

If you have a housing loan, a certain percentage of the loan balance at the end of each year is deducted from your tax amount. A tax return is required for the first year, but from the second year onwards, it can be handled through the year-end adjustment.

4. iDeCo contribution deduction

As mentioned in the previous article, the full amount of iDeCo contributions is eligible for income tax deduction. For someone with an annual income of 5 million yen who contributes 10,000 yen per month, it is estimated that this results in a tax savings of approximately 20,000 to 30,000 yen per year.

The belief that "year-end tax adjustment covers everything" is a misconception

Many company employees think that "because I do the year-end tax adjustment, I don't need to file a tax return."

However, there are several deductions that cannot be processed through year-end tax adjustment. You need to file a tax return for medical expense deductions, hometown tax donations (if you do not use the one-stop exception system), or if you have income from a side job.

Conversely, those who do not declare these may be ending every year without receiving the tax refunds they should have received.

The tax return filing period is from February 16th to March 15th. Nowadays, you can file relatively easily using your smartphone via the National Tax Agency website.

What I want you to check today

I would like to suggest one thing you can do right now.

Please check if you have receipts or statements for medical expenses from the past year on hand. If it looks like they exceed 100,000 yen, there is a possibility that you can apply for a medical expense deduction in this year's tax return.

The tax system is designed so that those who are informed benefit. You don't need to think of it as difficult. Just by grasping the systems you can use one by one, your take-home pay will gradually change.