Year end tax return calculation confusion for misc income

[stephny]

I am filing my taxes and I can not understand the calculation of tax resulting from my miscellaneous income.

https://www.keisan.nta.go.jp/kyoutu/ky/sm/top#bsctrl - This is the site I use.

I would like to at least confirm that roughly it looks correct.

My salary income: 9 M ~ 15 M

My misc. income: ~3 M

National tax to be paid directly by me (not my employer) during year end tax return: ~600K

However when i look up my tax bracket i think it should be 33% (?) and I do not understand why it is 600K, smaller than 1M (3M x 0.33).

 

[nuocanhtrongmattoi1]

@stephny Being in the 33% tax bracket doesn’t mean that all your income is taxed at 33%. Tax brackets don’t work like that.

Your first 1,950,000yen is taxed at 5%, then from 1,950,000 to 3,300,000 is taxed at 10%, then 3,300,000 to 6,950,000 is taxed at 20%…and so on. Add all that up and you get your tax amount. That’s why the actual number is lower to the number you have.

I would recommend reading on how tax brackets work.

 

[stephny]

@nuocanhtrongmattoi1 I got it now! Thanks a lot! Amazing I did not know that.

 

[nuocanhtrongmattoi1]

@stephny Glad that I was able to help! Enjoy your unplanned tax money haha

 

[stephny]

@nuocanhtrongmattoi1

 

[mauriciosr]

@stephny

I did not know that.

Don't worry, lots of people around me were like you, thinking having a raise that bump them to the next braket will make them pay a LOT more taxes

 

[kristhuy]

@stephny

when i look up my tax bracket i think it should be 33%

It sounds like your tax bracket is actually 20% or 23%. Remember it's based on your taxable income, not your gross income. You can find out your taxable income by looking at line 30 on the 計算結果確認 page of the site you're using.

 

[stephny]

@kristhuy Thank you very much! That helps!

 

[paulthomas]

@stephny The tax office has some really well made materials that have been translated into English: https://www.nta.go.jp/english/taxes/individual/pdf/incometax_2022/01.pdf