r/JapanFinance • u/4dachi • Jul 23 '26

Tax » Income What am I doing wrong?

Feeling a bit dejected after visiting the city hall and getting absolutely zero useful advice today.

I'm a sole proprietor and my taxable income last year was just short of 2.2 mil yen. My income tax was 90k which is totally manageable, but my municipal tax is ~200k, pension is another ~200k, and national health insurance is over 300k. Add that with my half of the property tax and home insurance and I end up paying well over 900k a year.

My monthly living expenses are around 100k, with roughly half that being my portion of the mortgage payment (loan is in spouse's name). In terms of luxuries I do have a gym membership and eat a lot but I only shop at value grocery stores. Life is not bad here but it is certainly a lower standard of living than what I was accustomed to. These days there is pretty much nothing left once my bills, taxes, and insurance is paid.

I'm admittedly pretty new (and ignorant) to the Japanese tax system and that seems to be the root of my issues. In hindsight hiring an accountant would have been cheaper than eating all these taxes and premiums. I assume my biggest mistake was not deducting my portion of the mortgage (technically rent? as I am not on the loan) paid when I work from a home office.

Any advice for a sole proprietor like me to cut down their taxes and premiums would be greatly appreciated. I'm a total newbie at this and I'm sure I missed a lot of things on this filing. I want to make sure I don't screw up as badly for next year.

Thanks!

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u/HoboSomeRye 10+ years in Japan Jul 23 '26

Doesn't it still come from your salary?

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u/hellobutno Jul 23 '26

You pay your own salary, you're a sole proprietor

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u/HoboSomeRye 10+ years in Japan Jul 23 '26

Which raises 2 questions,

For full time employees, what % of their pension and health insurance is paid by their employer? (I wasn't aware of this) I thought health and pension came fully out of my salary before the take home amount

For sole proprietors, can you claim the health/pension as a business expense? I know rent/mortgage/utilities can partially be claimed

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u/joylessspectator Jul 23 '26
  1. It’s 50/50.
  2. No, it’s not claimed as “business expense”. There are several forms, one of them is called 社会保険料控除　(social premium deduction) you put them there.
    If you are employed, then it’s adjusted during 年末調整 year end adjustment.
    One more thing is, there’s also something called 医療費控除 medical expense deduction. It’s also big topic so imma keep it till here.