How to apply to the Hometown Tax Donation Program (furusato nozei)?
How to register to the Hometown Tax Donation Program (furusato nozei)?
If you live in Japan and are paying income and residence taxes, you should apply the Hometown Tax Donation Program (furusato nozei)!
You can get many delicious Japanese food on behalf of paying tax!
How furusato nozei Works
Furusato Tax Payment is a system that you can make a donation of 2,000 yen to the city, town or village you want to support. There is also a charm that a return gift is given from the donating municipality.
If you make a donation within the upper limit determined by the conditions such as your annual income, your tax amount (income and resident taxes) will be reduced by the amount obtained by subtracting 2,000 yen from the amount of donation.
For example, if a person who can donate up to 2,000 yen at the expense of 50,000 yen actually donates 50,000 yen to a city, ward, town or village that wants to support him and applies for a donation deduction, the tax that he or she should pay will be reduced by 2,000 yen minus 48,000 yen (Note).
If you donate 50,000 yen, the amount of tax paid will decrease by 48,000 yen, so you actually paid 2,000 yen and donated 50,000 yen.
[Note]If you implement the “hometown tax payment" and file a tax return, the amount of income tax and resident tax (Prefectural inhabitants tax and municipal inhabitants tax) will decrease. If you donate 50,000 yen, the total amount of decrease in payment of (1) income tax, (2) prefectural inhabitant tax, and (3) municipal inhabitant tax is exactly 48,000 yen.
In a nutshell,
If you don’t do anything, you’ll end up paying 50,000 yen tax! → Nothing is available
If you order crabs (20,000 yen) through the hometown tax system, only 2000 yen is taken from the resident tax, and out of 48000 yen, 20,000 yen is returned as crabs!
Don’t say it’s too much trouble, you’ll lose if you don’t do this!
How to apply to furusato nozei
Check your “ceiling on donations"
From the Rakuten Furusato Tax Payment website “easy simulator" below, you need to check the guidelines for “ceiling on donations" by which you can receive a deduction for donations for Furusato Tax Payment.
If you enter information for “Annual income (Projected amount for 2020)", “family composition", and “dependent family member", the donation limit (Standard) will be displayed.
I think it is good to start the Furusato Tax Payment by using a part of the amount which is not full of the upper limit displayed there.
For example, if “Your donation limit (Standard) is 60,550 yen." is displayed, you can try around 40,000 yen from 10 to November.
If you plan to file a tax return, you can donate as many as you want. You can donate 5,000 yen to 3 local governments.
If you use the one-stop special system, you need to decide the amount of donation to one local government by considering that the number of donations is limited to 5 per year.
With December approaching, the annual income amount for 2020 has become almost clear, and when making Furusato Tax Payment to the limit of donations, it is necessary to calculate accurately not by “easy simulator" but by “detailed version simulator".
The next step is to select the local government to donate. Up to 5 local governments if using one-stop exceptions
I think it’s better to choose from the municipalities that are attractive for the return gift and the municipalities that you want to support. If you use the Rakuten Furusato Tax Payment site, you can search for the returned goods you like freely.
At the same time, you need to decide how to receive the donation deduction of the hometown tax payment. You can either file a tax return or use the “one-stop exemption system" which doesn’t require a tax return.
If you have never filed a tax return, you should use “one-stop exemption system" which doesn’t require a tax return. In order to do so, it is necessary to limit the number of donating municipalities to 5 per year.
If you have filed a tax return to receive a deduction for medical expenses or a deduction for donations, you can apply for a deduction for donations under Furusato Tax Payment by filing a tax return.
If you file a tax return, there is no problem with the number of donating municipalities.
If you don’t have any plans to file a tax return this year and “It’s a pain to go out of your way to file a tax return." you should start with a one-stop exemption.
Think about when to donate.
The next thing to consider is when to donate. Ideally, donations should be distributed from January to March, April to June, July to September, and 10 to December.
Because the return gift differs depending on the time of donation. You can enjoy various special products according to the season.
If you make a donation to many local governments without dispersing the period, there is a problem that the returned goods will be concentrated at one time.
It’s OK as long as it can be preserved like rice, but fresh food may not fit in the refrigerator. In order to eat seasonal foods in season, it is desirable to eat them in different seasons.
However, the Furusato Tax Payment must be made on a 1-year basis (from January to December) using the maximum donation amount. Those who have not yet received the Furusato Tax Payment will have to concentrate on 10 to December this year.
From 10 to December, Furusato Tax Payment is concentrated. That’s because people who leave the limit of donations are rushing to pay the hometown tax.
Therefore, popular returnable gifts are sold out early. If you pay the hometown tax from 10 to December, it’s better to do it early.
If you are donating to multiple municipalities, I think it would be better to distribute the gifts at least in October, November and December so that the gifts will not be only the December gifts.
If this year’s hometown tax payments will be concentrated between 10 and December, then from next year, plan to disperse and donate in January to March, April to June, July to September, and 10 to December.
I recommend Rakuten because it is easy to use with many local governments.
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