Residence cards, U.S. taxation and pension posers

A mixed bag of topics for this week’s edition of Lifelines:

‘Gaijin card’ deadline looms

First up are the new residence cards, which have replaced the old alien registration cards (aka gaijin cards) for foreign residents. If you are still using your old card, be aware that the deadline for changing over is July 8. You can apply for the new card at your local Immigration Bureau office, and just need to take along a passport-size photo and your alien registration card.

Unlike the old card, the new residence card doesn’t carry information about your passport, date of entry to Japan or place of birth. Visa/status information will no longer be stamped in your passport, so you must always carry your residence card when leaving Japan and coming back in. One advantage of the new system is that you no longer need to obtain a re-entry permit if you leave Japan for less than 12 months.

The taxman cometh

Next, reader JT wrote to us querying some information from the Jan. 28 special on U.S. taxation with Calvin Tong. The article stated that the statutory deadline for filing for Americans living overseas is June 15 (not April 15), and that overseas filers do not need to do anything to get this automatic two-month extension.

However, JT notes that the IRS (Internal Revenue Service) Publication 54 (2014), “Tax Guide for U.S. Citizens and Resident Aliens Abroad,” contains somewhat different information.

“Those IRS filing instructions say that you must attach a statement to your return explaining which of the two qualifying situations (noted in the publication) entitle you to take the automatic extension,” JT writes. “The same instructions note that ‘the regular due date of your return is April 15,’ not June 15 as suggested by the Japan Times.”

Calvin Tong commented on this:

The reader is correct in noting that April 15 is the regular deadline. In IRS language, it is called the ‘original due date’ or ‘regular due date.’ For the two situations that allow an automatic two-month extension to file a tax return into June 15, one must, on April 15, be either a) living overseas or b) in military service on overseas duty. In these cases, June becomes the second and extended deadline. The IRS calls it the ‘automatic extended due date’ or ‘automatic two-month extension.’ Nothing needs to be done on April 15 in order to get this benefit.

However, I should have added two qualifiers. First, as the reader points out, a statement saying that a U.S. citizen or resident was living or on duty overseas on April 15 should be attached to the tax return when it is filed, presumably between April 16 and June 15. It doesn’t have to say anything special or be signed separately. Tax preparation software programs (and definitely if prepared professionally) will typically print out a generic statement to that effect, if the question on where one was living on April 15 is answered appropriately.

The second point that I should mention is that the automatic two-month extension to file does not extend the time to pay. Late interest is charged from April 16. The rate is nominal — currently, at 3 percent annualized, i.e., if one owes $5,000, it is 41 cents a day until paid; if $10,000 is owed, it is 82 cents a day until paid.

People have different opinions on the late interest charge. Some are quite OK with floating the government’s money, on the assumption that they can earn more investing the funds in the meantime. Others do not like to pay anything extra at all.

Got any pension posers?

Finally, one of the most frequent topics that come up in readers’ queries to Lifelines is the Japanese pension system. We are planning a pension special later on in the year. Readers are invited to send in questions and those with the widest appeal will be selected for publication. Please note, however, that Lifelines cannot handle the intricacies of individual cases. Send your questions to the email address below and put ‘Lifelines pension special’ in the subject line.