So I’m dumb and this was my first time filing taxes here and I put it off to the last minute and when I was filing I realized I was going to be paying way too much because of RSUs but I didn’t have time to apportion them correctly. And now I need to file an amendment to get money back and I’m worried they will deny me. I’m also worried that my residence tax will be insane because of this since it makes my income much higher than it should. I would love it if someone could double check what I did and plan to do, and it would be great to hear from anyone who has had to do anything similar.
For some background context I moved to Japan middle of January 2025 without a visa and immediately applied for a change of status to a spousal visa which was granted in May. I was on paid leave with the US branch of my company during this time and not working (being paid into my US account paying US taxes still). In June I was transferred to the Japan branch and started working. I asked the local tax office and they said I was considered a tax resident from the day I arrived (makes sense from what I’ve read here).
In Feb and May I had RSUs vest. These were shares from many grants I was awarded before I moved to Japan (sometimes several years before). Since I was still technically employed in the US my employer sold shares to cover the US taxes, nothing for Japan. In November I had more shares vest. I was working for the Japan entity by then so they sold shares to cover all my Japan taxes at 100% Japan-source. I don’t think they considered anything beyond what legal entity I worked for when they withheld taxes.
I screwed up because I converted the yen value of those vests and included it as Japan-taxable on my kakutei shinkoku and claimed the US withholding as foreign tax credit. I think this is wrong because most of the tranches were granted before I moved, but I foolishly made the full value of all three vests as Japan-taxable (which shouldn’t be taxable Japan as 非永住者 unless I remit it). I also accidentally included a paycheck from January that was paid before I arrived in Japan.
So I’m hoping I can file an amendment to get some of that back based on the days I was actually in Japan for each grant period. Here’s my math:
For each grant tranch (there are 13 across the 3 vests):
- Total days = calendar days from grant date to vest date
- Japan days = days from my arrival date to vest date
- Percent owed to Japan = Japan days / total days
- Japan taxable = value x Japan %
- The rest is US-source income
I also had to recalculate my foreign tax credit (外国税額控除) Japan since I can’t count the US tax withholding on the excluded US-source RSUs. That money can’t be credited so the foreign tax credit drops.
The result is that my income goes down by about ¥13.1M (RSU apportionment and paycheck from before I arrived). My tax bill goes down by about ¥5.2M, but I owe about ¥1.8M from the foreign tax credit I previously claimed but can’t use now, so my net refund is about ¥3.4M.
I’m planning on filing an amendment and I would obviously include supporting document showing the grant dates, values, explanation of my reasoning, etc, but wanted to check here with people smarter than myself first and ask some questions:
- Is this the right way to approach this whole thing? Recalculation and filing an amendment?
- Does the way I calculated the RSU apportionment look correct?
- Has anyone had to do anything like this? How did it go? Any tips?
- I want to get this done ASAP because I don’t want them to calculate my resident tax with bad info. Am I too late? If I’m too late am I just screwed for the whole year?
- Can I include other stuff in the amendment? I think I maybe forgot some other interest income, possibly remittances as well.
- Should I have an accountant do this for me? I feel like I’ve done all the work and can finish it myself but if it improves my odds of having this accepted because a professional submits it for me, I’ll pay them to do it. I would also like recommendations for who to use and how much to expect it to cost me.
by anpanmanjapan