This is a translation of the Japanese original. The Japanese version is authoritative; figures follow Japanese tax law.
The deductions that cut your tax come in two kinds: 16 income deductions, which come off your income, and tax credits, which come off the tax itself. An income deduction saves you your own tax rate (5 to 45%) of the amount; a tax credit cuts the tax by the full amount. You do not need to learn all of them. It is enough to know the ones your own situation allows. This article turns the deductions that are easiest to miss into a checklist for four patterns — a single employee, a dual-income household with children, someone living with or supporting a parent, and a sole proprietor. It then sets out the amounts of all 16 income deductions for the 2026 tax year (Reiwa 8), which ones the year-end adjustment handles and which need a tax return, and the main tax credits, all from the National Tax Agency's Taxanswer pages.
The short answer: the deductions you can use, and the ones you miss, by situation
| Your situation | Almost everyone uses | Available if you qualify (easy to miss) |
|---|---|---|
| Single employee | Basic deduction of 1.04 million yen, social insurance premium deduction | Life insurance and earthquake insurance premium deductions, iDeCo (the small business mutual aid / iDeCo contribution deduction), the medical expense deduction (over 100,000 yen a year), furusato nozei (the donation deduction), and the dependent deduction if you send money to a parent |
| Dual-income household with children | Basic deduction, social insurance premium deduction | The dependent deduction for a child aged 16 or over (630,000 yen for a university-age child), the special deduction for specified relatives where a child aged 19 to 22 earns a lot from a part-time job, the exception to the life insurance premium deduction for people with a child under 23 (a cap of 60,000 yen), and the special spouse deduction if your spouse earns 1.36 to 2.07 million yen |
| Living with, or sending money to, a parent | As above | The dependent deduction for a parent aged 70 or over (580,000 yen living together, 480,000 yen living apart), the social insurance premium deduction if you pay the parent's National Health Insurance or long-term care insurance premiums, the disability deduction (270,000 to 750,000 yen) if the parent holds a disability certificate, and a medical expense deduction that adds the parent's medical costs to your own |
| Sole proprietor or freelancer | Basic deduction, social insurance premium deduction (National Health Insurance and National Pension) | The small business mutual aid and iDeCo (the small business mutual aid / iDeCo contribution deduction), the National Pension Fund, the blue return special deduction (not an income deduction, but a deduction in calculating income), and salary paid to a spouse working full time in the business |
The tax a deduction saves is the deduction amount times your tax rate. On a 10% rate (a salary of roughly 4.5 to 6 million yen), a dependent deduction of 380,000 yen saves about 39,000 yen of income tax, and iDeCo contributions of 276,000 yen a year save about 28,000 yen. The following year's resident tax falls as well, by 33,000 yen and 27,600 yen respectively. For how income tax is worked out, see how income tax is calculated.
All 16 income deductions at a glance (2026 tax year)
The National Tax Agency's Taxanswer No.1100 lists 16 deductions: casualty loss, medical expenses, social insurance premiums, small business mutual aid and iDeCo contributions, life insurance premiums, earthquake insurance premiums, donations, disability, widow, single parent, working student, spouse, special spouse, dependent, the special deduction for specified relatives, and the basic deduction[NTA No.1100]. In the "Year-end" column, a circle means the year-end adjustment can handle it and a cross means you need a tax return.
| Deduction | Amount (2026 tax year) | Main requirements | Year-end |
|---|---|---|---|
| Basic deduction | 1.04 million yen (total income of 4.89 million yen or less) / 670,000 yen (6.55 million yen or less) / 620,000 yen (23.5 million yen or less) | Everyone. The top-up shrinks from the 2028 tax year | ○ |
| Social insurance premium deduction | The full amount paid | Health insurance, employees' pension, National Pension, National Health Insurance, long-term care insurance. Premiums you pay for a family member also count | ○ |
| Small business mutual aid / iDeCo contribution deduction | The full amount paid | iDeCo, the small business mutual aid, and matching contributions to a corporate defined contribution plan | ○ |
| Life insurance premium deduction | 40,000 yen each for general, nursing-care medical and private pension policies, up to 120,000 yen in total. The general category rises to 60,000 yen for people with a dependent relative under 23 (2026 and 2027 tax years) | A deduction certificate is required | ○ |
| Earthquake insurance premium deduction | The full amount, up to 50,000 yen | Up to 15,000 yen for old long-term casualty policies | ○ |
| Dependent deduction | 380,000 yen in general / 630,000 yen for ages 19 to 22 / 480,000 yen for age 70 and over (580,000 yen if living with you) | Aged 16 or over, with total income of 620,000 yen or less (salary of 1.36 million yen or less) | ○ |
| Special deduction for specified relatives | 630,000 yen down to 30,000 yen | Aged 19 to 22, with total income over 620,000 yen and up to 1.23 million yen (salary over 1.36 million yen and up to 1.97 million yen) | ○ |
| Spouse deduction | 380,000 yen (480,000 yen at age 70 or over). Reduced where your own income exceeds 9 million yen | Spouse's total income of 620,000 yen or less (salary of 1.36 million yen or less) | ○ |
| Special spouse deduction | 380,000 yen down to 30,000 yen | Spouse's total income over 620,000 yen and up to 1.33 million yen (salary over 1.36 million yen and up to 2.07 million yen) | ○ |
| Disability deduction | 270,000 yen / 400,000 yen for a specially disabled person / 750,000 yen for a specially disabled person living with you | Yourself, your spouse or a dependent relative. A child under 16 also qualifies | ○ |
| Single-parent deduction | 350,000 yen (380,000 yen from the 2027 tax year) | Total income of 5 million yen or less, a child in the same household, and no de facto marriage | ○ |
| Widow deduction | 270,000 yen | A dependent relative after divorce, or the death of a spouse. Total income of 5 million yen or less | ○ |
| Working student deduction | 270,000 yen | A student with total income of 890,000 yen or less (salary of 1.63 million yen or less) | ○ |
| Medical expense deduction | (Medical costs minus insurance payouts) minus 100,000 yen (5% of income where income is under 2 million yen), up to 2 million yen | Family costs can be added together. Chosen instead of the self-medication scheme (over 12,000 yen, capped at 88,000 yen) | × |
| Donation deduction | Donations minus 2,000 yen (up to 40% of income) | Furusato nozei and the like. No return needed under the one-stop exception | × |
| Casualty loss deduction | The loss minus 10% of income, or disaster-related spending minus 50,000 yen, whichever is larger | Disaster, theft or embezzlement. Fraud does not count. Carried forward three years | × |
Note: the amounts in the requirements are for the 2026 tax year (Reiwa 8). Conversions into salary income use the employment income deduction of 740,000 yen. The sources are the Taxanswer pages for each deduction (No.1110 to No.1199).
Tax credits: the mortgage tax credit, the dividend credit and the foreign tax credit come off the tax itself
| Tax credit | Amount cut | Procedure |
|---|---|---|
| Special credit for housing loans (mortgage tax credit) | 0.7% of the year-end loan balance (the borrowing cap and the period differ by type of home and year of occupancy) | A tax return in the first year, the year-end adjustment from the second (guide to the mortgage tax credit) |
| Dividend credit | 10% of dividend income (5% on the portion where taxable income exceeds 10 million yen) | Only where you elect aggregate taxation on a tax return (tax on dividends and the dividend credit) |
| Foreign tax credit | The tax paid abroad (subject to a cap) | A tax return (US stock dividends and the foreign tax credit) |
| Special credits for donations to political parties and to certified non-profit organisations | (Donation minus 2,000 yen) times 30% or 40% | A tax return. Chosen instead of the donation deduction (an income deduction) |
| Special credits for earthquake-proofing and energy-saving home renovations | 10% of the construction cost, for example | A tax return |
Furusato nozei gets an income deduction (the donation deduction) and a resident tax credit on top, which is why your real cost comes to 2,000 yen. For the cap and the paperwork, see the complete guide to furusato nozei. The flat tax cut was a one-off for the 2024 tax year and does not apply to 2026.
Five deductions that are easiest to miss, and how to claim them back
- The dependent deduction for a parent living apart. If you support the household with money you send, the dependent deduction applies (480,000 yen at age 70 or over) even though you do not live together. Keep a record of the transfers (the conditions for claiming a parent living apart as a dependent).
- The social insurance premium deduction for family premiums you pay. If a parent pays the National Pension premiums of a child at university, the deduction is the parent's (paying a family member's premiums is fully deductible).
- The special deduction for specified relatives, for a child aged 19 to 22. Even where the child's part-time earnings pass 1.36 million yen and the dependent deduction is lost, a tapering deduction remains up to 1.97 million yen. It was created in the 2025 tax year and has its own box on the year-end adjustment form (student part-time work and a parent's dependent claim).
- The disability deduction for a parent or a spouse. Even without a disability certificate, a parent aged 65 or over who has been assessed as needing long-term care may qualify through the municipality's "certificate of eligibility for the disability deduction" (the single-parent, widow and disability deductions).
- Adding up family medical costs, and comparing with the self-medication scheme. Medical costs for family members in the same household can be added together, and even if you fall short of 100,000 yen, the self-medication scheme is available once over-the-counter medicines pass 12,000 yen (which one is better).
A deduction you forgot to claim can still be recovered. An employee who has never filed can make a refund claim for five years from January of the following year; someone who has already filed uses a "request for correction" (amended returns and requests for correction). For a sense of how much the year-end adjustment gives back, see when and how much the year-end adjustment refunds.
Frequently asked questions
In a dual-income household, which parent should claim the dependent deduction for a child?
The parent on the higher tax rate saves more. If the husband is on 20% and the wife on 10%, 380,000 yen times 20% saves about 78,000 yen for him against about 39,000 yen for her. A child under 16 is different, though: there is no income tax dependent deduction, and the claim only affects the resident tax exemption test and the income test for the child allowance.
Are the resident tax deduction amounts the same as for income tax?
No. For resident tax many of the amounts are smaller: a basic deduction of 430,000 yen, a dependent deduction of 330,000 yen, a spouse deduction of 330,000 yen, a life insurance premium deduction capped at 70,000 yen. The difference is worked out at the 10% resident tax rate. The data from your year-end adjustment or tax return goes to your municipality and is applied automatically to the resident tax from June of the following year.
Summary
- Deductions include 16 types of income deductions, which are subtracted from income, and tax credits, which are subtracted directly from the tax amount.
- Income deductions reduce tax by the deduction amount multiplied by the tax rate, while tax credits such as the home loan deduction and dividend deduction reduce tax by the full deduction amount directly.
- The medical expense deduction, donation deduction, and casualty loss deduction cannot be applied through year-end adjustment and require a final tax return.
- Commonly overlooked deductions include the dependent deduction for parents living separately, National Pension premiums paid on behalf of family members, and the special deduction for designated relatives aged 19 to 22.
- Deductions forgotten at filing can still be recovered through a refund claim or a request for reassessment within five years starting the following January.
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This article is based on the materials below. For the finer points of who qualifies, please check the relevant Taxanswer page.
Note: this article is general information. The deduction amounts are those for the 2026 tax year (Reiwa 8) and change from year to year.