The period for filing income tax returns has already begun.

The deadline for filing income tax returns is March 15, and the deadline for filing consumption tax returns is April 1.

If you file after the deadline for filing, you may not be able to receive some of the benefits you are originally entitled to (such as the 650,000 yen deduction for blue tax returns).
Be sure to file your tax return by the deadline for filing.

Now, what if you find an expense that you did not record after filing your tax return?

If the discovery was made before March 15, you must recalculate your income and file a new tax return with those expenses.
Until March 15, the last updated return is the official return, so there is no need to worry.

If you find that you have omitted expenses after March 16, the procedure will change.
You must recalculate your income and submit a “request for correction” （更正の請求、KOSEI NO SEIKYU）to the tax office.

The calculation method itself is no different from that of a tax return, but you must attach the documentary evidence to show what needs to be corrected.

A major risk is that you may be subject to a tax audit within three months of submitting the request for correction.

This is because if a request for correction is submitted, the tax office will need to verify that your entire taxable income is correct, not just the newly recorded expenses.
If, in the course of the audit, the tax office finds new mistakes in your tax return, correcting them may increase your tax liability.

Another method, which is not recommended, is to include the missing expenses in the 2024 tax year.
This is not the correct method for tax accounting purposes.
However, if the amount is not that large, it is unlikely to be big problem during a tax audit.
Of course, if the tax office requests you to submit a “request for correction,” you can comply. You would then be subject to a tax audit anyway.

What if you find that you have omitted income after filing your tax return?

If it is within the deadline for filing, file a corrected return immediately.
If it is after March 15, file an amended return immediately and pay any additional taxes due!!

If you leave the income omission as it is and the tax office points it out, you will have to pay additional taxes and delinquent taxes in addition to the additional amount of the main tax.

If it is considered “tax evasion,” you may be subject to a heavy additional tax of 35% of the principal tax, or your blue tax return may be revoked and you may lose the benefit of retroactive taxation.
The additional tax due can be quite bigger.

Let me tell you one thing to keep in mind about expenses.

Income tax and inhabitant tax are not deductible expenses.
On the other hand, consumption tax and business tax can be expensed, as well as automobile tax for business vehicles.
If you are filing a consumption tax return for the first time this year as an invoice-registered business, please pay special attention to this.

I am a tax accountant in Nagoya.
If you need help with accounting or taxation issues, please contact me.

Certified Tax accountant　 Motohiko Aoyama
e₋mail: bemyself8314@gmail.com