I am moving to Japan to work and live in March of this year. What do I need to do to this year in preparation for the 2018 tax season?

[DS30 · Accepted solution]

Your move to Japan in March 2018 will not affect your 2017 US income tax filing.

For 2018, you will need to remember to count your days in Japan for the Physical Presence Test so that you will be able to claim a partial IRS - Foreign Earned Income Exclusion (FEIE) for 2018.

If you pay Japanese income taxes on your Japanese income, you may also be able to take a Foreign Tax Credit for taxes paid on income that is also taxed in the US.

When reporting your Japanese income, the Internal Revenue Service has no official exchange rate. In general, use the exchange rate prevailing (i.e., the spot rate) when you received the income. Please refer to the following IRS links for more information about Foreign Currency and Currency Exchange Rates and Yearly Average Currency Exchange Rates

Additionally if you set up a foreign bank account in Japan, you may need to consider filing an FBAR related to all foreign financial accounts over $10,000 USD in aggregate.