all right welcome to retired Japan TV where we talk about personal finance investing and life in Japan I am so thrilled to have Dean yoshimoto with us today I first came across Dean on LinkedIn where he's he's very active he's very helpful uh and I was really impressed with some advances so I asked him to join us on the program and he's here and he's very kindly agreed to ask answer some of your questions as well so uh we'll be having a conversation and then as we talk I'll try and bring in some
of the comments and questions from people watching live now you might have noticed there's only two of us here today so my my co-pilot my co-presenter Daniel can't make it today so I'm a bit gutted about that but still very excited about talking to Dean so hi Dean thanks for coming along tonight hey Ben thanks so much for inviting me uh this is actually the first time we're sort of talking face to face I think it's just been chat messages on LinkedIn uh glad to be on board here uh I haven't rea
lly been you know so active this is actually my third first podcast I would say yeah so I haven't really been active on the internet and stuff so uh please bear with me I hope to give you guys uh some helpful information some actionable items and uh a relatively short period of time so awesome thanks for taking the time to talk to us and I think you know the retired Japan Community is quite friendly and nice that should be a good start for you okay take it easy on me I'm a little bit Rusty cool
so because Dean is a professional he did ask me to do a quick disclaimer here so I'll just read that out super quickly just so we're all on the same page so obviously All Views expressed in the podcast are for informational and possibly educational uh purposes and and not should not be considered as legal advice so the information just for reference and is bound to change in case of any amendments or changes to applicable laws we do not assume any responsibility or liability for any errors or om
issions in the contest of the podcast and we don't make any warranties about the complete lists reliability and accuracy of the information expressed in the podcast so basically we're just trying to provide you with information and you should certainly consult with a professional or the legal authorities if you have any questions uh before you make any decisions having got that out of the way uh Dean could you tell us a little bit about yourself so I understand you're a US CPA and a Japanese tax
attorney oh no I'm not qualified in Japan uh is this in the U.S yeah I'm a U.S EPA just a little bit of background about our structure my wife and I we work uh as a team she's actually the owner of a zerishi office she has a zdc license which is a Japanese tax accountant license and also a ea which is a enrolled agent basically specializing in in us and Japan taxes myself I'm a uscpe registered in the state of Arizona uh and I'm also focused on on taxes as well uh so um just a little going back
in history my wife's company started two generations before her actually so her grandfather started the business a little a little bit after the end of the war and so they've been in business about 75 years now and um my I kind of came into the picture when I decided to work with uh you know U.S clients and so we opened that part of the business in 2005. initially I was working from home uh and I got a lot of refers referrals from like the U.S embassy and things like that that was before I was
a CPA but once I had passed the test and got all my certifications we decided oh why not work in the same office so we kind of added that portion on and so we're more or less like a international tax accounting office now so that's awesome so the wife came first and then the CPA qualification yeah so actually um almost married in Hawaii I was uh you know working and she was uh you know still studying and uh and then we decided to make the move to Japan and then she was able to get her uh zadishi
license after a few years and so we kind of switched back and forth and so you know she's she's sort of in charge of the company and I'm uh you know sort of more of a helper to her I guess I would say that sounds very much like my wife's company as well fantastic so um what kind of work do you do day to day what does your kind of normal day look like are you working yeah since we're a small office you know there's all kinds of odds and ends you know I I also in addition to taxes I do uh the Bil
lings for the company I'm sort of the in-house Computer Guy although I'm not you know a developer or anything I kind of from my previous uh corporate job I was like sort of like the de facto system administrator you know people just basically come to me and complain about why their printout is stuck and things like that so I kind of carried over to um the office and I sound like the I.T guy but uh my main focus is uh working with U.S clients with uh IRS taxes but you know as you can imagine um p
eople you know typically they they also are from a certain State and depending on the state they're from such as Hawaii California you also have state reporting requirements as well as Federal IRS okay uh folks from say like the state of Texas where you know they don't have any state income tax so they have no reporting requirements so it really depends on where you're from and uh also another key issue is many states uh consider you to be even though you move to Japan they consider you to be a
have a temporary absence from Japan now I'm sorry not from Japan the temporary absence from their state so for example if you're from Hawaii or California unless you specifically state I'm permanent leaving I'm permanently leaving California Hawaii they will assume that you're just temporarily gone okay so what that means is you still in their eyes you're still a Californians your Hawaii resident and so you have to keep up with you know tax reporting requirements essentially you have to still pa
y taxes until you formally declare so that's kind of a big uh you know Japanese they say otoshiana right you know a trap where if you're not aware of that you could say be all hunky-dory here in Tokyo say oh you know I just have to report to uh you know the same as show in Japan and to the IRS but then you know you might sooner or later you might get a letter from say like the state of Hawaii tax office saying oh you know you our records show you haven't filed you know please file as soon as pos
sible and uh you know a lot of people at that point they panic and they just procrastinate and then the second letter might be you know we give you 90 days to file and you know a lot of people still they they sort of freeze up they don't know what to do and the next letter typically well you know according to our records you owe us you know five thousand dollars in taxes you have 90 Min 90 days to pay so uh you know that's their due process typically they go through maybe three steps or so but t
ypically in the end you know you once you get to the point where they're billing you you typically have to just pay or you know hire attorney and then go you know go through the formal court process and so that gets quite expensive quite quickly yeah that's something you you have to sort of be wary of you know it's fine if you're uh if your state allows you to be a temporary resident and they only tax you on say California income that that's fine too you know you you still have to file but in yo
ur filing it'll show that you don't have any Hawaii or California income so you have to you know read the fine print and make sure you're clear on the IRS side there's kind of no gray area you you always have to file and usually you don't you know I think sixty percent of the residents outside of the US they don't they don't pay taxes but if you're sort of a high earner to the typically if you make about a hundred twenty thousand dollars U.S or more and if you're single uh typically you would pa
y a little bit of taxes starting from there and you know I'm going going up into 150 200 000 you'll just keep on paying more and more taxes typically you won't exceed probably twenty or thirty thousand dollars from from our customer experience you know so even if you get if you're at a you know CFO or a high level executive here in Tokyo even at that level you probably wouldn't pay more than you know thirty thousand dollars U.S uh and that's thanks to you too and I'll get to this a little bit la
ter in the presentation and that's that's due to as you uh pay more salary in Japan or your I'm sorry you as you earn more sale than Japan you also pay more uh so tokuzay or income tax and that income tax uh is eligible for foreign tax credits so you can offset your your uh your U.S income with your the taxes you pay from Japan all right so technically you're not going to be double text yeah I'm sure you know um Japan and the uh UK they have a tax treaty uh U.S has tax treaties with seven years
old countries pretty much you know every any country that anybody would want to live in and that's the basic premise is uh avoidance uh and mitigation of double taxation some treaties are more generous than others they allow you to uh resource your income oh uh but in most cases the annexation issue by informed tax credit so in some cases you might have enough credits to cover your income in some cases you won't have enough and so you'll just pay the the Delta portion the difference between say
in our case the difference between what you'd pay in Japan and say typically the higher rate of use you just pay the delta or the difference if that makes sense and so yeah I give a kind of a simple example if the tax rate in Japan is say 30 percent and the equivalent for the equivalent salary the tax rate in the US is 40 percent then you would pay the 30 percent to Japan and the excess between 30 and 40 is what you would pay to the US typically okay yeah sorry we have a specific question about
uh what you're talking about before so how would you go about telling California or Hawaii that you're not resident anymore yeah that's a good question uh Most states have a uh online form uh and you know if you go to you know typical in California it's FTB uh dot gov I believe in in Hawaii they have a website you can see most most states have a pretty modern website where you can accomplish things online and you just you know fill out the form online in the worst case probably you'll need to pr
int out say like a pedia form and fill out you know your your new address basically and you know send it send it send the form in by snail mail uh yeah so I mean all in all it'll probably be a 10-15 minute process to get that out of the way okay the other while we're on that topic then I want to mention also is that um your your residence is not just determined by what you put on the form you have to demonstrate also that you are a bona fide resident of Japan for example there's things that coul
d disqualify you uh and this is kind of scary is for example um I am more or less from Hawaii so if I were to say register to vote in the state of Hawaii and uh say like uh hold an address in Hawaii as well as uh say have renew my driver's license in Hawaii things like that the state of Hawaii might view me as still a permanent resident of Hawaii despite me filling out a form you know so it's not just uh the form itself but it's your your actions as well as your intent okay so even even though y
ou you know accidentally do those things you know because the typical person wants to hang on to their driver's license obvious reasons you could still make make the claim that well my intent was to still live in Japan as a permanent resident but I just wanted to upkeep my license and um you know vote in in the U.S but uh you know you you may have some legal problems down the road so you might want to make a clean cut soon later and say not vote in the U.S in any state uh give up your your drive
r's license most driver's licenses recently they they uh require you to have a uh residence in that state as well so you probably have to give it up anyway you know so a lot of people tend to give a relative's address as their own just to yeah that's a problem I could come back and bite them I guess yeah so we have quite a few I don't I wouldn't say a lot but we have quite a few cases where um people use their you know their old college buddies address in uh the US on their tax forms and you hav
e to realize is that when you file with the IRS there's a sort of a central database and the states have access to that information so soon after they filed they say oh Dean guess what I I got a letter from the state of California that says I I need to file it like how did they find out it's like well when you file with the IRS if you have a California address guess what they're going to zoom in on that and they're going to you know sort of take advantage of that information so you have to be ca
reful what kind of information you let out even um you know agents are known to scour through the the internet right so if you're posting things say on LinkedIn or whatever about how you uh earn tips at a restaurant tax-free or you know or you have the side business and things and you know you're just sort of baiting them to look at your tax return if you don't have a a uh a Schedule C or E supplemental or self-employment income schedule on your tax return you know they're going to be able to uh
say call you on that well well on on the you know online on the internet on YouTube You're bragging about all this fancy income and so you know your your self-employment business and this and that and so um you know how come you haven't haven't found you know have you reported that income so the IRS is following you on Instagram basically yeah yeah I mean it's your your eat bait right I mean they're proud and you know a lot of times you want to you want to brag to your friends but you just got
to be careful of what you put out there right we do have another hopefully quick question um about taxes so this is my first year working in Japan can you explain the process for getting your credit for Japanese taxes in the US I'm from the I'm from Texas so no State Texas would this be the foreign and income exclusion I guess uh yes yes so if you have you had a slide some some uh then this might be a good time to start start the slides or uh it's actually the the first slide addresses that but
oh okay did you send me the slides uh I don't yeah okay no problem no problem I don't think I got those okay so but great great question from Chris um former Texas resident but um so to qualify uh for the foreign they have What's called the foreign income exclusion so basically your first hundred twenty thousand dollars of income that you earn abroad is excluded from taxable income okay so the way you qualify for this is usually uh two ways uh either you live in say Japan or any other overseas c
ountry for a full calendar year okay so that that would be uh see like if you just came in in June you would you would have to uh for your qualify you'd have to go through June of 2024 but also to the end of 2024 because you need a full calendar year okay that's one way to qualify or you can pass the time test which would be 12 consecutive months and within those 12 so basically from June 2023 to 2024 within those 12 consecutive months you would have to have at least 330 uh days within Japan so
basically you can't go on a vacation for more than say 30 days uh in that 12-month period okay those are the main two ways you to qualify and then if you're under 120 Grand basically you would exclude that income on your tax return using various forms and you would be able to be you know have no taxable income you know be tax-free for U.S however okay Dean I'm very sorry I did find the slides that was entirely my fault okay here we go so yeah as you can see on on here uh you have you know you kn
ow requirements of course it says on the top left start here do you have foreign income yes is your tax home in a foreign country that's another requirement so you have to be uh uh obliged to pay taxes in Japan so you know for example if you're in the U.S military or certain uh say Embassy uh officials and ambassadors and things typically they're under the so-called sofa agreement so they're technically although they're in Japan technically it's still like they're on U.S soil as far as taxes so
they're not subject to taxes in Japan so therefore they can't qualify for the foreign income exclusion okay so you have to be sort of a normal expat you just came here uh non-military uh you know you work for a typical company in Japan and you have to pay you know various other taxes uh and that those taxes would qualify and you also if you uh look at the chart if you if you scroll over to the right you also have to be either a U.S citizen or a resident alien okay and Resident alien you know tha
t's kind of confusing what's that basically it's just a way of saying green card if you are a either you're a citizen or if you have a U.S green Card you're sort of treated the same uh as far as U.S taxes go okay and you can see below that there's sort of a maze of complications on how you qualify and this and that I won't get into all the details of that but um you know basically most U.S citizens and most green card holders would qualify for the exclusion okay and that's a big deal because I t
hink uh as I stated earlier probably 60 percent or more of expats abroad uh uh qualify for this and they pay no U.S taxes and it also simplifies the process because it's just an additional form and it's more or less a one-year qualifying period so it's pretty straightforward yeah pretty straightforward if you're going to be taxed abroad then I guess this helps yeah and I I you know most most people uh you know in this situation would be able to you know say use Turbo Tax or even just go to the I
RS website download the PDFs and follow themselves because basically you just need an additional form for the foreign income exclusion okay you probably are able to do it yourself I would say okay about this actually sure um which is uh if you do not claim the foreign earned income exclusion uh and end up paying American taxes would that make your future Social Security higher and would it reduce your Japanese taxes okay that uh that's an excellent question okay Social Security tax is kind of it
s own animal okay in the sense that in the US okay I I know if you've ever looked at your pay stub you know if you work in the USA it's very confusing right you have uh U.S income stat tax state income tax and then you have uh things that relate to Social Security you know and it's usually marked as Social Security taxes uh there's Medicare things like that but those because those are in their own category uh by not paying federal tax uh you it doesn't affect your Social Security okay what you'r
e putting into Social Security okay so I know that's that's a bit confusing but um basically once I guess to put it simply once you leave the US unless you are specifically paying Social Security taxes your Social Security benefits will not grow past that point okay so that's what that's what you need to be careful of right because if say you you plan to work for 30 years and the first 10 were in the U.S and the you know the remaining 20 are in Japan uh that's kind of like my situation by the wa
y I always worked the first 10 years in the U.S so I do have 10 years of Social Security it's not much uh but once I came to Japan uh you know for the remaining of my work here say 20 years I can pay into the Japanese linking system okay now there is a way to pay into your U.S Social Security as an option okay and the way that's done but it's only open to self-employed people okay so if you're say in Japan and and I think then you're more or less self-employed right pretty much yeah yeah okay so
if you're saying for like Ben and you run this self-employment type of business you would uh file this the self-employment form uh which is Schedule C I believe on your IRS tax return and you you would report you know both your revenue and below that your expenses uh subtract expenses for revenue for net income and then that income that you you make from your so uh from your um self-employment you could apply the foreign income exclusion to that but you still are technically required to pay U.S
Social Security taxes on on that okay uh so you could you could continue you could continue to pay uh Social Security and and Medicare that's the requirement you need to continue to pay social security Medicare and I think the total is about uh 14 uh taxes for the two so that would allow you to continue to accrue Social Security benefits okay uh if you're however if you're already paying uh linking in Japan which you know Nanking is a statutory requirement right so basically you have to pay an
inking or technically let's see you might not get your visa again right technically you might have to even leave Japan because they won't renew your visa after five or seven years or what you know whatever your uh Visa length is okay so uh uh but uh you could uh if if you don't want to pay in both countries which is you know sort of you know how you can't really afford to pay pensions in both Japan and us so they have a it's called a colonization agreement okay the Social Security colonization a
greement between the U.S and Japan allows you to pay in one country say you pay it continue to pay in Japan and you don't pay in the U.S and there's a procedure for for doing that uh but you're able to apply the Japan the total the total credits to either country okay or or both so uh it gets kind of confusing there are a lot of rules okay so you could say uh in my case in 30 years I would have 20 years accrued from living the last 20 years you know living in pain in the Japan system 20 years an
d my first 10 years in the US so total I have 30 years so I could say run some scenarios on the on the spreadsheet uh also the the ssgov site in the US has some uh you know scenario analysis type you know calculation worksheets that you could fill in and figure out what's the best situation for you you might get more Social Security if you get paid in the U.S uh or you might get more if you get Lincoln from Japan in some cases you could maybe say split it up say conceptually half and half Japan
and the US um so you'd have to kind of run through those scenarios and see which is best for you based on your tax situation so it gets it's very complicated uh but you know of course we can help you with those types of analysis uh and you know we have we have done a few of those what's the normal result what's the typical result in terms of optimal strategy yeah I think I think I think most people they neglect the U.S Social Security side and most people uh they're they're not they're not self-
employed so typically it's it's better for them to keep paying into to linking on the Japan side okay we have another question about basically I think non-filing basically [Music] lived in Japan didn't bother filing their tax returns in the U.S and what's the consequence going to be so I I am a frequent problem but I but I think it's sort of half you know there's sort of half and half compliance I would say half the people I meet have not filed at all and half have been you know diligently keepi
ng up with the system okay so um I think the thing you have to be most worried about is um you know uh if you look at this exclusion at the top of it it says can I claim either exclusion or the reduction okay so the key word is claim it must be claimed or else basically you don't have it okay so it's not uh it's not a a given right it's something you have to uh consciously go out and claim okay and the way you claim it of course obviously is by filing a tax return okay so as long as uh the IRS d
oesn't come to your friend and say um you know sooner or later they might uh pick up on your friend not paying America you know taxes and send out letters and so forth and perhaps in The Last Resort they they might send a nasty letter that says um you know you have to file but even if you do file you are not able to claim the foreign incoming solution okay and that would be really devastating they have the right to do that it's not a right it's a it's a privilege and it's a privilege you have to
claim performing income exclusion so um I guess what I'm saying is uh yes it is a it is a huge danger in that sense okay so can you imagine ignoring it is not going yeah which is just gonna yeah it's gonna snowball okay right so let's say if he's uh typically if if the typical American I think you know in the 30s or 40s by by that age you're typically making a hundred grand 150 Grand something like that and typically you might tip over above the exclusion threshold and also um uh you know you m
ight have a family and kids and and basically you know you just have a lot at stake right I mean you're not just a you know typically people come here to Japan as a single and they do the jet program and they don't really think about the future so they're not so diligent about uh uh filing U.S taxes but it it compounds uh there is a statute of limitations um and a lot of people are mentioned well they can only come after me for for three years or whatever statute of limitations and they try to p
lay a lawyer and uh you know hope that they're they're protected by the statute but it's very clear that um in many cases there is no statute of limitations so for example in cases of of crime uh or if there's substantial um uh what they call tax evasion substantial amounts of tax evasion right so they they could uh perhaps extend the limitation period indefinitely you know it could be so you would basically have no limitations no right and yeah and I guess I guess in in the end uh it would be v
ery hard for you to to move back because you know once you have an address in the US instantly they would they would bill you for it right and they would come after your assets your your bank accounts your house things like that so it's very very dangerous so don't ignore the IRS then yeah so please uh take care of that right away um you might even if if they're a high earner and the period is over 10 years they might even it might even be wise to hire an attorney in that case you know because p
robably if you're not finding U.S taxes you're not um complying with with Factor regulations so fatca is the um foreign account uh a Reporting Act and so there's layers of reporting you need to do for your bank accounts for your assets if it exceeds certain thresholds and those penalties are typically ten thousand dollars a pop for for per fence okay so if they send you a warning and you don't reply it's ten thousand uh if you if they tell you to file a f bar and you don't file them that's anoth
er ten thousand they might add on top of that if you have additional accounts that they find you know it'll probably be another ten thousand so it could easily be thirty thousand dollars or more of fines right so basically for most people that could be you know half or more of their life savings right it could change your life drastically so um but then you know there you know I'm kind of doing this scare talk but on the bright side there there's ways to come clean okay and and typically what we
what we recommend for people is to uh file a certain amount of years you know I can't say whether it's three or five but typically if it's less than 10 but we would have to take a look at how much money you made and so forth um you know what what's your we'd have to do more or less a risk assessment to see what your risk is you know where you're you know also what it makes a difference do you do you have a house in the U.S do you have bank accounts that they could garnish you know that would in
crease your risk profile of course but if all your assets are now in Japan and you really don't have any assets in the US then it's also a different scenario you know so right there might be more amenable to negotiate at that point yeah yeah it's really Case by case you know okay we have another tax filing question which might be good here um so this person's been filing Lawrence has been filing using the foreign tax credit method which allows him to claim tax child tax credit uh would it be bet
ter to use the foreign land income exclusion method or in what cases would that be better okay then I I have to come into you have a really really intelligent audience members here and they're all asking great questions and so so Lawrence yeah I this is the point I wanted to get to uh is because a lot of people assume that you can either take the exclusion or the form tax credit because if if you you know read the instructions that this instructions in in the uh the IRS instructor kind of allude
s to either one or the other but the uh the truth is you can take both okay so the way that works is that uh say for example I just I think the example is the easiest way to to visualize is say you make 200 000 U.S okay and as I mentioned the form um income exclusion excludes the first hundred thousand or so right okay so that leaves you with a hundred thousand taxable income okay but on their remaining income what you can do is you can apply the foreign tax credit to that remaining income okay
so however your foreign tax credit will be limited to a percentage of taxes you pay okay so how so how do you calculate that percentage it would be uh this is sort of just it's more complicated than this but typically uh because you excluded half of your income your income was 200 000 and you still did one hundred thousand that would be half or 50 percent uh therefore you would only be able to use the remaining 50 of foreign tax credits okay so I know that that might be kind of confusing but bas
ically you can use both but you would have to reduce your foreign tax credit based on that percentage that I just mentioned right what if your income's under the foreign and income limit can you choose to use some of that allowance or do you have to use the whole 120 000 yeah okay the thing about the income exclusion is once you use it the IRS wants you to continue to use it every year okay so they have a rule is uh that if you don't use it in a subsequent year uh say like it was more beneficial
or you had some sort of reason that you wanted to use it was more beneficial to use foreign year uh you can but the penalty is that you won't be able to go go back to the old system the foreign income exclusion for for five five years okay and after that five years is done you have to ask the IRS for permission you have to uh it's essentially go through a a letter ruling process okay and that typically costs maybe a thousand dollars just to go through that process okay so you're gonna have to p
ay money I mean in the end it might be worthwhile okay you know because in the end you you may have run the numbers and it saves more taxes to you for you to go back and forth between both systems but you don't have a lot you don't have carte blanche you don't have the freedom to go back and forth as you wish you have to go through these procedures you have to ask the artist for for pain permission and pay those fees and in the end they could uh reject you right they could say no no I'm sorry yo
u have to stick to the foreign tax credit system okay in that case uh it could be detrimental uh you know depending on your situation right whether you're making a salary or if you you know if you change from salary or self-employed it might be beneficial to switch and things like that but if you can't go back to to the system that's preferential then you'll just lose out so just you know make your decisions wisely when you you make the decision to change from one to the other you can always use
both okay I guess the the key point to sum it up once you use the foreign income exclusion you need to keep using it pretty much okay so you want to really think ahead before making any decisions yeah yeah so every I I think the weakness that I see most in most Americans uh not just Americans I mean right myself included I you know the you know you have to look past you know uh what you're present you have to forecast what what am I going to be doing five years from now am I going to return 15
years am I gonna you know a lot of people typically they'll work uh a salary job for the first 10 years and of course they if they're ambitious they want to quit their job and start their own business and then their tax Association changes at that point and then you know so on and so forth and also as you get older you accumulate Investments and so you need uh you know if you buy a house I I know Ben you're doing a lot of a lot of uh podcasts and posts about owning a house and things like that u
h and so the interest earned deduction or the interest paid deduction you know all those things just add up and as you get older your test is getting more complicated you know so I have some clients they they file uh you know 100 pages of tax return this is incredible right I mean yeah it's like oh yeah it's almost like a phone book you know it's you could use it as a weapon almost I mean uh yeah as you get older and wiser you know typically you might start your own Japanese KK or you might inve
st partner up with a friend go 50 50 on a on a KK things like that and as long as you're U.S citizen there's tons of reporting you have to do still you know the uh so-called informational returns you know so as an American uh uh any pretty much anything you do the is reportable if you have uh you know income from a trust or a state a foreign state if you are involved in a a foreign company also uh I think then you alluded to in some of your uh Nissa and your other podcasts uh Americans have it t
ypically hard because the of the pfic rules right I was about to ask about that yeah it's a good segue to go into that so you know say for example um you know once you live in in Japan typically I mean all your income is typically Yen right unless you have a rental in the U.S um so you're gonna be putting your your Yen savings away in a savings account and you know earning nothing basically so now they have Esa and all these other Investments is it worthwhile for you to to get those and uh you h
ave to I think view it with caution okay and the biggest caution is uh I would say or the biggest uh problem is that the US has very complicated rules for owning uh shares in a foreign company okay they have so-called pfic rules okay and P stands for Passive okay so if if you to be if you invest in the typical mutual fund that's a a passive foreign company okay if they earn either 75 of their income from passive Investments or have 50 or more of passive income assets okay and that your typical m
utual fund meets those thresholds okay so you you fall under uh pfic reporting requirements okay so your your typical uh this is true especially I I've done some research on this by the way and uh with Japanese uh J reads for example real estate investment trusts in Japan typically have a corporate structure so they definitely would fall under pfic rules okay and okay so something like Toyota would be okay because it's yeah so Toyota is is uh you know is is a word a typical company like Toyota i
s not you know it's not obviously they have employees they sell cars they have product development so they're you know they're a normal company they're not passive but a mutual fund is basically pulled money and they're just throwing it into the stock market or bonds or whatever and it's Pat so there's a big difference between passive income and active income so Toyota would would be I would say active income for the most part right they're selling cars they're they have offices globally so you
can yeah you can invest in Toyota and it wouldn't be a problem okay but if you invest in a say a certain kind of a fund that includes Toyota then you might have a problem because that fund might be classified as a passive foreign corporation okay so what's what's the problem with pfics though okay so yeah so getting to that um it's very complicated and the the taxation on that I I guess to put it in when it's it's punitive Taxation and under this taxation you might have to pay as much as let's s
ay a 50 rate or more on your on your on your say like dividends can you imagine okay can you imagine right you typically pay WOW uh yeah you're paying uh you know say you're in the 20 tax bracket 25 so typically you pay the same amount on dividends on 20 25 on dividends as well as your wages right but say oh you you bought this J re that which is a pfic and because of the the punitive task scheme you're paying 50 Say on Just for those dividends right so you might as well not buy it I mean if you
're paying that much tax I mean you know what what the hell right you might as well put the money under your mattress right I mean so and that not only uh do you pay but I think some of the forms if you look at the IRS instructions uh the the uh the typical time to complete the farm is 24 hours or something right so can you imagine a typical accountant would would probably charge you 50 to 100 an hour right so can you can you imagine paying two thousand dollars or more for it for just the pfic r
eporting for I mean it's just nuts for each one right you probably yeah probably for each yeah imagine so if you own uh J Reed for Tokyo you know or for uh mitsui fidosan or whatever you know you own two J REITs that's probably you know four thousand dollars just for the forms right which allow you yeah I mean you're gonna make maybe I don't know three three percent in dividends or whatever and you know after taxes it's good you're gonna make less than one percent or less net after now is one pe
rcent worth it right I mean you might as well leave it in the bank so uh be careful uh some some companies will have you have to sort of uh scrounge around for this this information is not easy to find I think uh certain countries like Canada have done a great job with their you know if you if you look up Canadian funds uh because they they also have this pfic problem but if you look up a typical Canadian mutual fund they have PFS pfiz information right on the website uh this this fund has 50 of
you know pfic blah blah blah right but in Japan there you know there's not enough interests or Investments for for them to put it on their site so you're you're sort of on it's a wild west you're sort of on your own you have to research I've done a little bit of research but uh most of most of the research I see it was done in the 80s or 90s you know there's nothing really current about what kinds of funds are pfic's and some companies might be too right some of these holding companies the uh y
eah yeah definitely right so yeah you mentioned Toyota so there's Toyota motor but you know typically there's like a Toyota holding company that might be say holding all sorts of foreign exchange or things you know because they do a lot of business abroad so naturally they're going to have foreign exchange reserves which they're going to put into Investments it's all earned interest and dividends on uh until they decided to use it for operations of course and you could be uh you know annoyingly
investing in those those companies as well right so probably at the least you know there could be a few percentage of the the stock you own and you know you might not even know it right I think even the company Executives don't even know right because why would they right if they're listed in Japan so I think what's happening is that Americans are being sort of I wouldn't say discriminated against but they're sort of being discouraged from investing abroad right because uh as you know it's you k
now it's really difficult for Americans to to say like cash a check or to uh you know open savings accounts and things like that because many many banks will just once you say you're an American citizen they'll just you know say oh you know turn you away or you have tons of extra forms you have to to fill out uh and they don't know themselves how to fill them out because they're so little if they're they're so new and the laws are changing all the time and so uh best best to avoid any complicate
d Investments as much as possible so I think the basic advice is for Americans to just invest in America using U.S Brokers and and U.S ETFs and so on yeah yeah definitely definitely so I think in the past there there was you know the typical uh my typical customer would invest in say E-Trade Schwab Merrill Lynch uh TD Ameritrade and slowly but surely those options have just disappeared you know I get calls every so often saying you know what they they said uh because American I have to close my
account what should I do and so I think there's we're down to maybe one brokerage company one or two brokerage companies that do take Americans living abroad okay the the other thing you can do is uh you might be able to use a relative's address you know uh and so you know because there could be legal ramifications for that as well but uh typically the people who still have the accounts uh are more or less using their old address from when they you know when they they used to live in the US they
open the account then and they moved to Japan but they just kept the account open and and some companies I know they grandfather you in if you're if you're in that case but they're just not opening any new accounts because there's there's many more laws now yeah there is one option in Japan which is the interactive brokers company which recently switched to Japan so interactive brokers Japan is now taking new clients so if you're a U.S citizen that might be a good option for you if you haven't
already okay that's news to me the only other one I've heard was I think either was TD Ameritrade or E-Trade I think were the other ones I heard of but I know Merrill Lynch pretty much kicked everybody out so yeah so we've talked about filing IRS taxes and we've talked about pfic so are there any other kind of things that people don't tend to know about that they should oh okay so um uh going back to the slideshow I think the last two slides uh talk about it would be I think then pages eight and
nine talk about tax treaty yeah okay there's one uh this this one is kind of uh sideways I don't know if you can turn it over uh yeah I don't think I can do that at the moment okay everyone just turn your heads yeah maybe if you go if you go to the next slide then uh page nine okay so this basically test treaties are very complicated so I think if you just look at this table that's kind of self-explanatory you see I've circled Japan and if you look look under there's columns at the top interest
dividends pensions and annuities so you can see the numbers there in those columns 15 12 and a half ten those are percentages okay so um if you're a say uh this doesn't apply typically to Americans but this applies more to non-americans or Japanese I would say Japanese citizens who uh invest in the US and receive dividends would be limited so if you look like in the dividends column it says column six paid by us there's a 15 in that in that con if you go down to Japan or or rather 10 . so the m
aximum rate that you would pay on dividends you earn from the US as Japanese citizens if you claim and apply the tax tree would be 10 percent which is very favorable right typically you would pay uh 20 or more as a Japanese citizen if you if you don't yeah I don't have this kind of thing the difference the typical withholding is 30 but if you fill out the certain forms you can uh claim exemptions from withholding so they won't withhold anything if you fill out the forms properly I think you have
to have either a social security number or ITA in number Claim those tax treaty benefits and um uh but you still need to say um file a non-resident tax return such as the 1040 NR and and pay those taxes typically so um but to sort of address tax treaty issues in general the tax treaty is pretty much the the document that makes the foreign tax credit it gives a legal basis for the foreign tax credit okay so that's it's the document that talks about double Taxation and reducing or eliminating the
intent to reduce or eliminate double taxation between citizens of Japan and the US okay and there's all these different uh articles 1 through 15 I believe and each article um describes a situation as to say like real estate or capital gains or personal property there's all these different categories and but basically this table here you know sums it up and so you can get treaty benefits um the the thing is the typical U.S person uh is bound by what's called a savings Clause okay and a savings C
lause is kind of a simple way of saying if you're U.S citizen the treaty doesn't apply to you the U.S yeah so U.S tax laws supersede the tax treaty for most Americans because of the savings laws okay which is important yeah yeah so um in most cases uh for non-us Citizens tax treaty supersedes local sketch right so what does that mean so if Japan says you you normally pay 30 if the tax treaty says you pay 10 tax treaty rules okay which is which is excellent okay uh the U.S tax treaty is also very
beneficial for Japanese as far as portfolio interest okay so like if you have a Schwab account a bank account in the U.S for example typically that interests won't even be taxable uh all the or be taxable at reduced rates okay we have a few questions that have built up could we do a little kind of quick fire around okay sure thing slightly random questions so the first one is about uh inheritance taxes after people leave Japan so I think this was amended so this law when this law came in people
were quite upset and then they kind of changed the rules slightly to make it less of a burden yeah okay and so this is uh I'm not licensed in Japan my wife is but um I've read up quite a bit and um yeah there's there's all sorts of uh uh inheritance that relate and you know there's things like exit tax and inheritance that relates to uh well you either you either pay it before you leave or you can elect to postpone it for five years and pay it back when you return and things like that and I gue
ss you know the as far as the follow-through that's you know I guess you're asking how is it enforced right I mean so it's quite new so we don't really know yeah you don't you don't know but yeah but um you know I I think what you could assume is that you know the extent of the law is you know typically it only the extent of law is only uh local typically right but as you know I mean if you're say like a international fugitive or criminal right I mean though you know they they will find you know
find a way to go after you using extradition and so forth right they will get you the us or whatever uh through a tradition treaties to you know have them send you back to Japan to face the courts here right but uh you know you have to be quite a big violator for them to do that but it has to be worth it right right I mean you know the whole Carlos gone thing right I mean um it's not out it's not impossible for them to do that but you know is it worthwhile and things like that so you have to we
igh those risks but then also I think you have to when you're looking at I think with any country not keeping up with the tax laws in any country I think you have to uh be ready to abandon your your Visa status and you know if you're not going to return to Japan I you know and I I can't really I don't want to give you Visa advice here but you know typically um you know you have to think well if I don't follow the rules then if I return to Japan I probably wouldn't be granted a Visa right because
it's going to be on my record I mean Japan Visa regulations are very strict um if you look at some of the blogs they say if you miss one pension payment regular name can payment and they're not going to redo your renew your permanent residence I mean that's pretty harsh so if you imagine you skip out on inheritance which is much worse right I mean it's more it's more deliberate probably uh it's probably a large amount of money uh so you'd probably be in even more trouble right so yeah you'll pr
obably get a knock on the door one day yeah I think you're I think generally what you're looking at too is that uh even the US is making it hard for people too who basically I think people would typically if they got into trouble they would just split down and move to the Cayman Islands or something right but you're even sitting in the US now they're putting restrictions on passport renewals so uh this is very recent too in the last uh three years I think or so uh if you owe taxes of more than U
.S taxes more than 50 000 um they are the IRS and the Visa administrations they talk to each other and you can't even they'll revoke your passport right so this has even happened I think uh one of one of um Trump's uh campaign managers or something pretty much was stopped on the runway he was in some foreign country about to the plane was about to take off and then the authorities came in and said no you can't leave because your passport is is invested as of as of now right that's yeah that's ho
use I mean and they and he was you know some sort of international criminal whatever they wanted him really bad right so so going back to what I was saying if you know if they want you they won't find a new post to get you so um you know just keep that in mind okay we have a super technical question now which is I don't quite understand so how is a Roth IRA conversion treated for a Japanese Citizen and non-permanent resident and how is VA disability treated in Japan very two very technical yeah
okay I would I would say um I'm not an expert on VA but I know uh you know for for Investments Roth IRA is there so-called U.S tax advantage Vehicles right so um pretty much all the U.S raw even even traditional IRAs Roth IRAs you know they they don't qualify as uh for for tax benefits outside the U.S okay uh so um uh if say you know I had this come up fairly recently as well too so if you're if you're in Japan long term uh for example Japan doesn't treat uh you know typically the benefit of Rot
h IRA is is of course you pay taxes upfront or you you put into the Roth IRA after tax dollars so that when you retire the distributions from the Roth IRA are tax-free typically right if you're in the U.S US citizen live in the U.S it's tax-free but if you're a U.S citizen in Japan uh they don't recognize Roth right so if you're a permanent resident here you pay taxes on your worldwide income Roth is not tax advantaged or anything it's it's nothing it's just a regular fund as far as Japanese see
s it so you'll pay you know typically on distributions probably that would be regarded as uh similar to wage income so you would pay a graduate degree anywhere from probably 15 to 50 percent just as you would any other Japanese income okay uh not non-permanent residents um that's a little bit different you know I think the first five years if you live five you have to live five years or more out of the last 10 years to be considered a permanent resident but as a non-permanent resident it's more
dependent on whether you remit the money to Japan or if you keep it abroad okay so that's that's one loophole I guess you can take advantage of but um it's only good for fight you know basically for five years right so um what happens after that you know well you have guess what you have to pay taxes if if you're going to bring that money in or even if it even if you leave it abroad in say the us or some other country outside Japan you still technically have you know our Bible for taxes on that
because all all money remitted to Japan or not is taxable after the five years and so it's not a good long-term strategy right I mean you know the systems don't really work very well together yeah I mean I mean think about a Roth IRA you know you know that's right I'm gonna retire someday and therefore I want to save money but if you know if this non-resident thing uh is only good for five years then what you know what do you do after that now do you are you you're forced to go back to the U.S o
r at that point do you pay taxes on they know is just so you're better off not not getting into that and uh you know just maybe you know doing something else finding some some uh loopholes in the Nisa system you know non-pfic you know would be the opposite right so niso would be taxable on the U.S side uh because nieces in Japan but if you're yeah yeah that's a good point but also um then um so you have to you have to remember that um you know you might be able to apply if you have uh accumulate
d foreign tax credits uh you might be able to yeah you won't you won't be able to apply credits you earn now but typically I think one of in one of my slides I don't recall which one I talk about unused foreign tax credits that you can uh carry them back uh yes okay you can carry back one year or carry for 10 years okay so this is where you have a little bit of flexibility so say like um say like you um had some taxes that you paid on uh you know uh you know I mean typically you own both Nisa an
d non-nissa funds right typically you don't just buy Nisa so let's assume you own both okay so both uh Lisa and not Nissa fall into uh what's called passive category Farm tax credit they're divided up into baskets depending on the type of income so dividends capital gains and interest would be in the passive income basket okay so you can sort of intermingle these foreign tax credits and you can carry it and as it says on the slide you can carry it back one year and carry forward 10 years okay so
you have a lot of flexibility so basically I guess what I said is kind of confusing but to to put it in one sentence you can use the credits you paid on your non-neesa accounts to offset the taxes on your Nissan account as it pertains to IRS taxes okay so they're they're fungible this might be a good way to reason to have an accountant yeah yeah they're fungible within the category okay I guess is that you know so Pat you know passive credits whether it's Nissan non-nissa uh capital gains inter
est it's all passive okay so if it's within the basket you can use it to offset other types of Investments okay I've got some more quick fire questions for you um um I think we're kind of done with specific questions from the audience I've got a few quick ones so for example uh what kind of person would you say needs a CPA and and what kind of person maybe doesn't need one okay so um CPA I guess I would say I don't want to toot my horn or anything but it's a it's a heart exam uh you know if you
talk it needs to employ a CPA so not not the quality oh yeah okay so um if you need a CPA as a you know as a as a Tax Advisor tax preparer yeah you don't uh typically there might be several categories of test repairs uh like my wife is an EA or enrolled agent so uh she took the test that's put out by the IRS in my case I'm um certified on a state level as I mentioned State of Arizona okay um so uh in some instances my license because it's the only it's a little bit uh inflexible but I think over
all what you want to look at is the person's experience okay there's a lot of CPAs who uh don't do tests they only do say there's there's a lot of areas of accounting right there there's auditing there's corporate accounting there's uh you know there's tax of course and you know uh there's people who work in the Investments Investment Banking people have CPAs as well they do a lot of you know stock analysis and things like that but they don't necessarily know taxes and even within taxes there's
individual and corporate as well okay so what I'm saying is you just you want to look at their their resume basically don't ask them and tells you questions uh I'm an individual so what's your experience with with individuals okay and I I mean enjoy I invest in uh I have a lot of Cayman Island Investments and this and that I I have company seasons in Japan and China and so you know a typical content won't have all that experience Frankly Speaking I you know I don't I I've never you know done tax
es related to came in on and so forth so my specialty my competency would probably be limited to Japan and U.S only okay and uh if if you uh I I do actually you know have some customers in other countries like Singapore Hong Kong but you know I do less than probably five or or less a year of those right so as opposed to Japan U.S taxes I do dozens and dozens here so of course I have a lot more experience okay so um we're sort of heavy on more individual side so if you have sort of a big KK or yo
u know that has multiple subsidiaries and you're uh buying components in Japan exporting them to the US and you have factories in the US and things like that that's that's very that would be difficult for someone like like myself because there's things called uh transfer pricing involved where you'd have to price those those items that you're transferring out of Japan and putting in into the the US uh you know balance sheets and so forth and so um basically you just yeah you just need to look at
the person's specific background and know how to ask the right questions you know and I think that the most straightforward way to do that is just to say you know here's here's what I am you know I'm a uh Banker or whatever this my salary is 350 000. I have a hundred thousand stock options I have some you know E-Trade accounts and fraud I also own 50 of a KK here in Japan can you help me you know if you're up front uh from the outset you know a lot of people they don't they don't tell you all t
his because uh I think a lot has to do with trust right they don't they don't trust you with their personal financial information so you know you you sign you said yeah sure okay I can take your case and then suddenly they're like oh by the way I have you know a company in the US and you never mentioned that and so by the way yeah yeah oh so you know suddenly your quote you know my principle goes from 500 to to two thousand dollars you know just based on that and like what you know that's too ex
pensive and you know what a rip-off but yeah come on you got to be upfront with me from the start right so yeah let's be fair to each other yeah so to flip that so for example we've had a couple of questions like this so what kind what would you say would would mean that someone needs a CPA rather than just doing the paperwork themselves yeah so um okay I guess you know if I could rephrase that question can are you able to replace the expertise of a CPA okay I guess that's you as an engine will
say like I would say um to to each individual and I've been asked that point blank and what I say is well if you're good you have to be good at numbers and also good at at uh law interpreting laws right I mean uh taxes are basically laws converted into percentages and so forth in various situations so you have to be able to uh interpret laws and of course you have to be good at math but you don't have to know calculus you just it's basically uh high school math right it's mostly multiplication y
ou have a 30 rate times the principal 100 Grand or whatever you know and you figure out the taxes you have to know how to do fractions you know how to feel comfortable also with exchange rates you know a lot of people get confused are you able to say then for example would you be able to convert a hundred thousand dollars U.S to yen in your head you know right if you're able to say you know if you're at that level then probably you know you might be suited for for doing tax accounting okay um I'
m sorry what was I going to say okay so um not not only knowledgeable in law but how many hours do you have to spend okay the laws change very frequently okay since I've been here there's been you know not I was here in Japan and then 9 11 happened so then you had things like the Patriot Act uh and following that you know recently you have with covid the cares act and each time there's all these sometimes major uh sometimes it's minor changes to to the tax code you know I mean they went from uh
you know a situation where a lot of Americans had to pay Alternative Minimum Tax and then they raised exemption for example so typically you won't pay Alternative Minimum Tax now without the latest laws but you know they're putting limits on things like I think last year you could only deduct 50 of Mills uh business meals and this year and next year it's up back to 100 right so how do you how do you keep track of that I mean you have to know it that the law it was only good for say 2018-19 becau
se of covet or something like that right or uh you know some some crazy law or you know you just don't know and uh how much time and energy do you have to keep up with that um and I guess what I what I could do also now is offer for those who do want to put in that effort there is if you go to the IRS website they do have um uh you can sign up for emails and that's what I did when I first started my careers I I went there and I subscribed to the they have automated they have automated email serv
ice so if you go to IRS you just I think you type in in the search parameters email and informational emails or something like that and you can subscribe to uh anything that you know you have all these categories you can press I think in my case I press International topics International tax topics and I get bombarded with probably five minutes in the in the comments I think I just found that link so yeah so you can uh what I'm saying is you can subscribe to those and you know if you have intere
st if you want to say probably a lot of you do your taxes on your own and you want to continue to do taxes but you want you're sort of unsure you need some information sources so uh you go online but it's you get conflicting information depending on who you which website you look at so you go straight to the source sign up to these IRS uh automated emails it's a wealth of information half of it's not relevant half of it's trash it's like interest rates and you know you get a lot of also it's rea
lly help for this they talk about the latest crimes and people who who lost say like they lost their license or they are arrested sentenced to jail and you get a feel for well what's the threshold how much what does it take for people to go to pre you know and you get a pretty good idea and the answer is if your tax problem is more than six figures over 100 to 200 Grand you have a highly likelihood of facing prison time that's my conclusion okay based on the information I've seen I'm not I'm not
a lawyer or anything but I read these uh criminal test crime updates and uh bookings and stuff and that's what the conclusion I've come to but um if you want to do it on your own um yeah just just be careful the laws change every year um you have to keep up with it um if not you can you know hire somebody like us and you know in the long in the long run it might be you know a better choice typically uh usually often in the beginning especially I can't say every year you're going to save money b
ut typically in the beginning there's there's something that you don't know of and Ben I don't know if there's there's another slide I I think I I'm not sure if I had in there but it may talk about um some specific things as far as uh oh okay uh okay I'm sorry maybe not but there I didn't make a slide for it but okay let me give you one example what a tax accountant or CPA can do for you a lot of you don't know that um fighting jointly is much more beneficial in Japan you can't file jointly righ
t um I mean you basically each person files their own text but it can have the choice of filing jointly if you're married or fine as married fighting separately okay and uh as an as an American abroad the artist allows you to uh even if your your spouse is not a U.S citizen the Earth allows you to treat your spouse as a U.S citizen for test purposes so essentially you can more or less double your standard deduction you can put in a be put in a more favorable tax rate schedule and things like tha
t uh all you have to do is put out a statement that your both you and your spouse signs that says um you know I would like to be treated as U.S tech citizen for test boots okay the downside to that is that be careful because because your spouse has investments in Japan if your spouse yeah if your spouse has a lot of income has a lot of real estate owns a company then that's probably not a good idea because they would have to do all the fat uh information reporting or be subject to as I mentioned
earlier you know ten thousand dollar fines per incident for non-reporting okay that can be very daunting okay but uh option to that is the point I wanted to get to is there is a head of a sort of in-between status it's called head of household okay so you could be say like uh typical American married to a Japanese um non-resident okay uh if you have dependents one or more depends if you have basically children or grandparents or relatives living with you you can um qualify as head of household
okay the only other requirement is that you have to pay at least half of the uh household expenses for the upkeep of the household okay so it was typically you do right uh to do so you can uh instead of filing married filing separately and single is the most punitive the highest you know you pay a highest taxes okay so you want to avoid as much possible either file this mode file and joining but an alternative to that for spouses who might have high income or a lot of assets is you go to the hea
d of household route okay head of household allows you to say in my case I'm American so I would file that as a head of household my my wife would not would not be on tax return at all it would just be the information on myself and my children my children would have to have though a social security number okay so they would have to either uh have found the social security number to pass or have U.S citizenship to get a Social Security number okay yeah head of household is sort of in between I th
ink uh you get 15 000 in standard reduction for singles head of household I think bumps it up to about 20. okay if you're filing Mary jointly it's like it goes up to 30. so you get you get the in between uh deduction amount and also the tax rates if you look at the tax brackets they're very favorable uh so um you know it's it's good to know so I guess you know going back to do you need a CPA well uh how many how many of you out there in the audience knew of that right so if you did know that the
n you probably don't need a CPA right but if people hearing comes really low I guess if you're just earning under the foreign if you're under the exclusion you still have to feel you have to claim the foreign income exclusion which you know if you don't if you're not good at math or not so comfortable with law it still could be fairly daunting right because you still have to fill out the form and the forms are typically you know three pages of uh you know check boxes and things and you have to y
ou know what's your view what type of visa do you have and when did you arrive and things like that and you know it's just a lot of options that you have so you know it could be a source of confusion until you get used to it okay we have another question um which is if you don't have copies of your old returns can you get them from the IRS okay yes the iris though I believe you have to to pay dollars copy or two dollars per year or something okay um however the IRS has a free transcript service
okay so so David that's a good question so um a typical CPA would know how to read that transcript okay and a transcript might be okay for for things you know related to business as well you know or maybe even applying in some cases see if you're applying for 28 or things like that they might require a tax return but sometimes for a business or or things like that they might be okay with just getting attacked tax transcript for even you can do that for free I think you can go back about maybe on
ly five years I think first for a certain time I think some transcripts they go back 10 years but it sort of depends on the level of detail you need okay so um yeah it is possible if if uh in the worst case uh I think you can pay about two dollars per year which is not bad but um there is a way if you go to the irs.gov website and you type in the search parameters transcripts there's a procedure you can you know online you can you know I think you have to open account or whatever go through secu
rity clearances and then you could have access for free basically for for transcripts they have transcripts for your returns they have transcripts for your accounts you know so you could see how much say was withheld the history of payments you made refunds the IRS issue things like values you know they have some pretty intensive options or basic one that just so your tax return there's several options you have okay we've got two two quick questions from a crypto Enthusiast it seems so can you r
ecommend any websites or resources for U.S citizens to read about taxes and retirement laws in Japan okay I think I I have to defer to to Ben on this because it's far yeah I mean you know Texas other than the ones I've mentioned um you know I think you you can get a lot of contradictory information you know so you want to go to the source but when you do go to the source office you know off it's often it's more confusing okay so but as I mentioned uh tax the Law changes pretty much you know ever
y two years or even sooner so um you know let's just say for example if you made some retirement Investments based on current laws what if you find out five years from now the law has changed and you know so you have to have a little bit of predictive ability as well right I mean just because that's the law today um you know a good example is the value I think a lot of you have heard of the backdoor Ira right so it's it's a kind of way to increase you know how much you can put into Ira by going
to this backdoor route okay and so it's been sort of um under the radar but because I think you know people have been publicizing on Reddit and on the internet you know I think it's caught the eye of the US Congress so I think there's a lot of movement to stop the vector Ira right so what does it do for people who've already you know invested in it right I mean you know you've done this first you've done this for 20 years and this has been your retirement strategy and suddenly it's gone I mean s
o what are you going to do now you know and so um so that's where you that's that's why I say oh you know always go to the source um if you do look at second you know a third third party websites just sort of uh be as be skeptical that those laws won't change a lot of times they might be selling you products you know uh you know they they want a commission usually to sell you those products that promise tax deductions but they they probably already know oh they're gonna change the loan this is n
ot going to be valid in five years so they're just trying to sell you as much product before the Law changes or something right so just just be careful and I I would I would defer to you Ben I think you would know probably better as far as Investments there's a lot of sites out there I I know of a few my favorite one was um the uh bubble heads that's wonderful yeah the Bogle heads for overheads was sort of the go-to website I think John Bogle I think he passed away fairly recently but he was sor
t of the guru as far as mutual fund index Investments and getting mutual funds at low low cost fees you know less than typically less than a half percent are pretty much uh low cost tax tax efficient investing at low cost basically so both I think it's bogleheads.org okay but then I then again most of the investors are us-based I I found a few threads on Japan but it's mostly if you you live and work in the U.S okay unfortunately there's very few I mean I think there's only probably 20 000 Ameri
can residents with permanent residents right I mean that this just we're just a drop in the bucket here and so yeah so it's not not a lot of information I just have to kind of scrounge around and do your own research in Japan I like um reddits Japan Finance sub is pretty good um and then the retired Japan forum is a good place to ask questions and of course your Forum too Ben right yeah yeah I bet you're here yeah and I think I think the fun thing about yours is you have a lot of sort of anecdot
al stories you know I think you share a lot of personal stories about your health and uh going through uh I think you went through a very major kind of hit hip operation right yeah yeah yeah a couple years ago that was fun and then yeah you said and you know things things like that I think it just makes your your uh website you know your your whole presentation is is very interesting and you know on a personal level it's not you know uppity up and you know sort of High Finance it's very down to
earth and relatable oh yeah yeah I don't know anything so I think yeah I think all the listeners appreciate that uh myself included you know I I get kind of intimidated by High Finance people myself you know so I try to explain it in simple terms and I think you've done a great job Ben and I think you've done a nice job today as well explaining yeah listeners sorry are you currently accepting new clients yeah so um currently I mean we're sort of past the the tax season for 2022 so we we've we've
we've uh gone through and done the bulk of cash returns but of course we're still accepting U.S taxes are really kind of a year-long thing because there's always people say like if you're involved in a partner a U.S this partnership or something you don't get the so-called k1s until maybe June maybe this month you know most of the attacks for most people they get their tax forms by February but if you're say sort of uh you know involved in a partnership or some kind of LLC your tax forms don't
come until June so those are the types of uh customers that we're dealing with now uh LLC people people doing real estate and things like that so uh between typically between June and October is sort of the next busy period and typically after October it's it's pretty uh we do a lot of no that's when I do a lot of my continuing ed take my classes tuning in my CPA also I do a lot of you know meetings at the time I don't have a lot of time to meet with clients during the busy period so if people n
eed to meet they want to have sort of you know half an hour maybe an hour or sometimes even more to talk with me typically I'll do that in the fourth quarter of the year uh through the first second quarter very busy third quarter a little bit less busy but um you know so I got trans clients trickling in and of course if you are one of those people I'll be happy to take a look at your your situation as well how can people contact you can we can we share a link in the description later yeah I thin
k that where Ben you found yeah I'll just post your LinkedIn details if they're interested you can you can contact me through the messaging there or I think if you if you look at the about section of my company I think there's a email address there sort of hidden but I still get tons of spam just because I put that there but um uh some some people are able to email me but you know most people they'll send me a LinkedIn message and then from there I'll give them my email and then we'll follow up
yeah uh also just a caveat LinkedIn you know third-party apps are not uh the IRS and other typical CPAs they don't recommend you sharing your personal financial information through third-party apps you know like even Yahoo mail uh LinkedIn you know if you're gonna share your personal finances you're probably better off doing on email not or another non-third party app you know just to be safe great the initial contact that they can get in touch with initial contact uh you know of course we can s
hare our background information and then we'll probably switch to email quick quickly after that for you know just to ensure security and confidentiality of information wonderful yes if you need help with your U.S taxes then just get in touch with Dean and uh hopefully he can help you out okay I appreciate it but well we've gone uh uh more than an hour and a half been it's impressive all right sorry to uh yeah I hope nobody thank you so much Dean for taking the time to talk to us today I appreci
ate your invitation and answer all those questions sure sure thing and I'll be available to follow up uh you know if there's anything else uh of course um you know or if things weren't unclear I know I sort of rambled on through a lot of these answers with some technical terms so if things are unclear please feel free to contact me probably through through Linkedin and I can you know perhaps clarifying more layman's terms for for you and uh great wonderful thank you very much Dean and uh appreci
ate it so much and you're a wonderful client I'm sure in the comment section I think your clients for their you know very intelligent group you have here very I can feel proactive and you know and very intelligent and uh on top of things and so I wish them luck in their their tax Endeavors and I wish you luck with your your retired Japan business as well Ben brilliant thanks very much Dean thanks so much take care now bye now right thank you so much to Dean for joining us today and and going thr
ough all those questions um right Daniel is not here so we've decided to postpone the regular um retired Japan TV content so that would be the news section our Deep dive The Forum kind of dive uh everything we're just gonna do it next month sorry about that the next retired Japan TV is going to be on July 24th uh we have a mystery guest uh because you don't have a guest yet but we will have a guest on July 24th same time 8 P.M on Monday and I hope you'll be able to join us there live if you want
to join the discussion and you can of course access the videos on YouTube LinkedIn and Facebook after the event so thank you very much uh good night have a good month and we'll see you again in July
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