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Self-employed people should know! 7 recommended tax-saving strategies [2025 edition]
If you work as a self-employed person, you cannot avoid "tax". The more your business goes well, the more tax you will have to pay. That's why it's important to take "tax saving measures". In this article, we will introduce 7 carefully selected ways to legally and effectively save on taxes.
1. Utilizing blue tax return filing (650,000 yen deduction)
The first thing you should prioritize is filing blue tax returns.
By submitting an application for approval of blue return and keeping double-entry bookkeeping,Deduction of up to 650,000 yenis available.
💡Even beginners can keep track of their books relatively easily by using cloud accounting software (freee, Money Forward, etc.).
2. Proper accounting of expenses
Business-related expenses should be recorded as "expenses."
- Communication costs (smartphone/internet)
- Transportation costs (train fare, gasoline)
- Entertainment expenses (meals with business partners, etc.)
- Housework apportionment (if you use part of your home as a workplace)
✏️ Always keep your receipts and make a note of what they were used for.
3. Joining the Small Business Mutual Aid Association
Small Business Mutual Aid is a great way to prepare for your retirement while you work.Full income deduction availableExcellent system.
You can set your monthly premium in the range of 1,000 to 70,000 yen, and you can also increase or decrease the premium during the period. The Small Business Mutual Aid Association has a loan system, so you can save on taxes while keeping cash on hand.
4. Utilizing iDeCo (individual-type defined contribution pension plan)
iDeCo is a system where you can save for your future pension yourself, and the contributions areFull tax deductionIt will be.
Investment gains are also tax-free, making it a great long-term investment.
🧾 The maximum amount varies depending on your occupation, so be sure to check before you start.
5. Utilizing hometown tax donations
This is a popular system in which you can receive a gift from the local government to which you donate for a self-payment of 2,000 yen.
Even for sole proprietorsIncome tax and local resident tax are deductedThis provides tax savings.
6. Consider incorporation if necessary
If your profits exceed 8 million yen per year, you should consider tax savings through incorporation.
In many cases, corporate tax rates are lower, and it is also possible to diversify income through executive compensation.
7. Utilize full-time employee wages
If family members help with the business, you can distribute your income by paying them a salary as a "full-time employee."
However, you must file a blue return and set the amount appropriate to your job content and working hours.
summary
Tax saving measures are not just about "saving on taxes = making a profit," but also about "preparing to pay the appropriate amount of tax."
Start by doing what you can now, according to the scale of your business and your revenue.