Question:

What is the spousal deduction?

Answer:

Spouse deduction is a system that reduces the tax burden by deducting a certain amount from income tax imposed on a taxpayer who has a spouse with a small income. As a result of the tax reform, the exemption for spouses will be reviewed from fiscal 2018.

The details of the tax reform are as follows.

The maximum amount of spouse’s annual income (case of salary income) that can be deducted up to 380,000 yen will be increased from 1.03 million yen to 1.5 million yen. Its exemption amount is gradually reduced according to the respective income of taxpayer and spouse.

In addition, The maximum was placed on the total income of taxpayers eligible for spousal deductions. If a taxpayer’s salary income exceeds 12.2 million yen, he/she will not be able to receive a spouse deduction even if he/she does not have spouse income.

Aside from the tax revision above from 2018, JPY 100,000 increased of the upper limit on the annual salary income of the spouse will be scheduled in 2020.