When you start investing in real estate, you will have income other than salary income, so you will need to file a tax return.It may seem difficult for the first time, but it is not difficult if you understand it properly.This time, we will explain the first tax return for real estate investment.
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When a final tax return is required
If you receive salary from one place and the total amount of income other than employment income and retirement income exceeds 1 yen, you are required to file a final tax return.
A tax return is a way to calculate your income for the year and clarify the tax amount, and in the case of a salaried worker, the company subtracts the tax from the salary and calculates it, so I think it is usually difficult to be conscious of it.
Type of tax return
Blue return
This is the case where you have submitted a notice of opening of business and an application for approval of a blue return to the tax office.There are merits in tax deductions and tax savings for blue returns.
Submit a tax return and a blue return financial statement.
Special deduction
The blue return special deduction is usually 10 yen, and in order to receive a maximum of 65 yen, a business scale of 10 rooms or more in XNUMX buildings, books written by double-entry books, balance sheets and profit and loss statements created based on the books are required. .
Expenses spread
You will be able to process the amount you paid to your spouse or relatives as a business expense.
A spouse or other relative who shares the same livelihood with the blue return filer, who is 12 years old or older as of December 31 of the year, and who is engaged in business for a total of six months or more in the year.In this case, you will also need a “notification form regarding salary for blue business full-time employees”.
Losses can be carried forward and carried back
If you run a business in the red, you can carry forward the loss for up to three years.You can reduce the amount of tax by hitting the deficit of the first year against the surplus of the next year.Carry-back is the opposite of carry-over, as if there was a surplus in the previous year and a loss in the next year, part of the tax paid in the previous year will be refunded.
White declaration
Click here if you do not apply with a blue return.If you do not submit a notification of opening of business and an application for approval of a blue return, your tax return will automatically become a white return.If you file a white return, you will need to submit a final tax return and a statement of income and expenditure.
Flow of final tax return procedure
Income from January 1st to December 1st must be added up and taxes must be calculated, and the tax return must be filed between February 12th and March 31th of the following year.
Withholding slip
The income tax deducted from your salary may be refunded, so get it from your employer.
Financial statements
A ledger that records daily income and expenses. For blue returns, prepare a blue return financial statement, and for white returns, prepare a breakdown of income and expenditures.
The blue return financial statement has about twice the amount of description and takes time to prepare, so even if it costs money, the tax amount will be reduced.In addition, when using the blue return financial statement, it is necessary to submit a blue return approval application to the tax office within two months after starting real estate investment.
Tax return
Both blue and white use final tax return form B.The specific contents are the total amount for each item such as income, income, tax, income breakdown, social insurance premium deduction, life insurance premium deduction, attachment of withholding slip and identity verification document, deduction of social insurance premium, etc. Attach related documents and insurance premium deduction related documents.
Documents related to real estate such as real estate sales contract, rental contract, rent remittance statement, sales statement attachment, and related expenses such as real estate acquisition tax, property tax payment slip, loan repayment list, management fee・Certificate of reserve fund for repairs and certificate of consideration for transfer (unnecessary if stated in sales contract) are required.If you are investing in real estate, you will probably have insurance such as earthquake and fire insurance, so prepare insurance premium certificates and receipts.
Application
After preparing the documents, you can either submit them directly to the tax office, or you can file them electronically (e-TAX) via the Internet.If it's your first time, there may be many things you don't understand, so it's better to consult directly with the staff as you proceed.
What happens if you don't file a final tax return or don't meet the payment deadline?
Tax returns are an important part of determining taxable income.There are penalties for under-reporting and failure to report.
Delinquent tax
If you are late for the payment deadline after filing a tax return.
If payment is made during the period from the day after the due date to the day after two months have passed
Original tax amount to be paid x rate of delinquent tax x period until the date of full payment / 365 (days) = amount of delinquent tax
If more than 2 months have passed
Original tax amount to be paid x rate of delinquent tax x period from the day following the day after two months to the date of full payment / 2 (days) + delinquent tax from the day after the due date to the day two months have passed
Undeclared additional tax
If the tax return is not filed by the deadline, the tax amount up to 50 yen will be multiplied by 15%, and the amount over 50 yen will be multiplied by 20%.However, if you voluntarily report within one month from the deadline and it is recognized that you intend to report promptly, this penalty may not be applied.
Underreported additional tax
Penalties for paying less tax, such as making a mistake in the final tax return, or for many refunds.You need to pay the amount equivalent to 10% of the tax that was not enough, and the amount equivalent to 50% for the portion exceeding 15 yen.
Heavy tax
Penalties for tax evasion, such as making false declarations or hiding income.
In the case of under-reporting, 35% will be added to the insufficient tax amount, and in the case of non-reporting, the tax amount to be paid will be multiplied by 40%.
Summary
Real estate investment has a lot of things to do while buying and operating.However, since it is not an investment style that can be completed by one person alone, it can be said that it is an investment style that can receive the help of many people such as tax accountants and management companies.You may feel stressed because there are many unfamiliar things especially for the first income tax return.In such a case, it is important to consult with a professional as much as possible and create a situation where you can apply smoothly.
At Rich Road Co., Ltd., we will consistently support all aspects of investment real estate, from complete beginners to experienced people, from a wide range of real estate selection, loan consultations, post-purchase management, and renovations.
