I was just wondering if it’s common for NPRs from the US to get confused about their foreign sourced income, the Treaty, and to give their Japanese spouse USD to transfer and exchange to Yen for expenses, thinking that they only have to file taxes in the US?
Also wondering if anyone has known anyone who made that mistake for several years and what happened to them?
by Conscious1200
1 comment
> it’s common for NPRs from the US to get confused about their foreign sourced income …
Yes, we get many questions indicating lack of understanding, in particular regarding the specifics of how remittances impact taxation, but also, for instance, some people not understanding that working remotely for a foreign employer from Japan isn’t foreign-source income in the first place.
Someone not knowing anything about remittances being relevant as an NPR is rare, though.
> … and to give their Japanese spouse USD to transfer and exchange to Yen for expenses, …
Not sure what that refers to *exactly*. Could you clarify?
Are you saying that person is giving USD to their spouse via transfers (from a US bank account) into the Japanese spouse’s US bank account, after which that spouse transfers that money to Japan?
I don’t know, but if so, that wouldn’t sound like
being confused about NPR rules to me but being sufficiently aware and trying to actively cheat the system.
Or is that person sending money to Japan in some other way? By cash each return trip after a visit?
> Also wondering if anyone has known anyone who made that mistake for several years and what happened to them?
The NTA’s secret ninjas chased them down and butchered them. It was brutal.
Sorry, I couldn’t resist.
While I still don’t know exactly what your particular example is about actually, yes, I know quite a few people who didn’t know about the rules in the first place and just assumed for the first 5 years in Japan foreign-source income is not taxed at all. But also most people I know didn’t have a lot of foreign-source income to begin with. Those 100,000 to 300,000 yen they made usually stayed in thr US and perhaps a bit of that was exposed to taxation as they really only remitted by using a bit of their credit card to pay for their internet contrsct. What happened to them? Nothing. Does that mean it wouldn’t affect a different person? No.
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