US Social Secuty Benefits and Japan Income Tax

[kristhuy]

@confusedfl22

is there a specific USD-JYEN exchange rate to use?

You are supposed to use the exchange rate published by the financial institution that is involved in the transaction, as of the day of the transaction. But the NTA has also said that any mainstream source of exchange rates is acceptable, as long as it is used consistently (i.e., you use the same source for each transaction).

If your benefits are paid in USD, each payment will have the JPY value as of the exchange rate when it was received. However, the payment will also affect your USD cost basis (the average JPY acquisition price of all the USD that you hold), which is relevant to the calculation of your foreign exchange gain in the event that you spend USD or exchange USD for another currency/asset.

As you may be aware, Japanese residents can have US social security benefits paid into a Japanese bank account, which simplifies the tax treatment even more, avoiding the need to track foreign exchange gains, etc.

 

[ethzz]

@kristhuy

Japanese residents can have US social security benefits paid into a Japanese bank account, which simplifies the tax treatment even more, avoiding the need to track foreign exchange gains, etc.

I do this, and yes, it's easier than having to track the payments as is necessary for a US account. It arrives directly in my local bank account, already in yen, at an excellent exchange rate, and without any wire fees subtracted. The embassy in tokyo has someone with a SS brief to help setting this up. And note that it helps if SS uses your name as it appears on your My Number card (SS initially used my middle initial, after a call to the embassy they switched to using my complete name as on the MyNa card).

(and thanks again)