- Why the filing window — as a rule, 16 February to 15 March of the following year — means that what you have on hand in February is only what you kept by 31 December
- Why the test for a deductible expense is whether it can be clearly separated, which makes splitting your bank account and card more useful this year than choosing accounting software
- How keeping books feeds into the miscellaneous-versus-business income classification, and why the record-keeping duty is pinned to revenue from two years earlier
Quick answers
- Q: When do I have to start keeping records for it to count?
- A: Everything after the month you start gets easier — that is really the whole shape of it. Start in September and the last four months of the year are covered; January to August has to be pieced back together from dashboards and mailboxes. Start after the year rolls over and the entire year becomes a memory exercise.
- Q: If I earn under ¥200,000, do I still need records?
- A: The NTA's No.1900 threshold is written as an income amount — revenue minus necessary expenses — not as money received. Which means that without expense records you cannot tell whether you are over the line at all. The records sit upstream of the question.
This article is informational and educational content about how to keep records for side-hustle income in Japan. Working out tax owed, or deciding whether a particular payment counts as a deductible expense, depends on the scale of someone's income, how they work, and the shape of their contracts. Nothing here is a determination about your situation. Every rule is linked to the National Tax Agency page it comes from (those pages are in Japanese), so when you get to applying any of it, check with your local tax office or a tax professional. Tax rules change — confirm on the linked pages that what you are reading is still current.
I tried to do all of it in February once
The first year I declared affiliate income as a side hustle, my plan was to assemble the records in February. The commission figures were sitting in the dashboard and the deposits were in my bank statement. That would be enough, I assumed.
It wasn't. The commission side was fine — that part really was still there. What was gone was the expense side. Of the charges lined up on my card statement, a decent share were payments I could no longer identify. A book bought to write about, or a book I just wanted to read: the merchant string on a statement does not distinguish between those. Anything I couldn't reconstruct, I left out.
The amounts weren't large. But those few days were genuinely wasted, and I did the same thing again the following year. It took me two years to understand that February is painful not because of February, but because the twelve months before it left nothing behind.
The NTA's page No.2020 Kakutei shinkoku states that the filing and payment period runs, as a rule, from 16 February to 15 March of the year following the income year. So for 2026 income, that window opens in February 2027. Read the date backwards and it says something plainer: what you have on hand then is only what you kept by 31 December.
Which is why September is the month for this. With four months still to run, a habit rebuilt now covers a third of the year cleanly. Notice the problem in February and all you can do is try to remember.
Separate the money before you pick software
Articles like this usually open with "install accounting software." I think that is backwards. Install whatever you like; if living expenses and side-hustle money still run through the same account, the sorting work does not disappear. It just moves inside the software.
What actually helps is splitting the account and the card. Not as a matter of tidiness — because of how the deductibility test is written. On expenses that straddle private and business use (kaji kanren-hi), the NTA's No.2210 Necessary expenses says the deductible portion is limited to the amount that can be clearly separated, based on transaction records, as having been directly necessary for carrying out the business.
The condition is whether it can be clearly separated. Try to separate it later out of one mixed account and you have signed yourself up to do that in February. Split it now and the separating is mostly done at the moment you open the account.
- The receiving account: pick one account for commissions and stop moving living expenses through it
- The paying card: put tools, ad spend and books on one card and keep them there
- The place files live: decide on a single folder for statements and receipts
I underrated the third one for a long time. Split accounts, yes — but payment notices still buried in an inbox and receipt PDFs scattered through a downloads folder. That is not split. A record with no agreed home takes so long to find that it ends up unused.
Deductible is not about the amount — it is about whether you can separate it
No.2210 describes necessary expenses two ways: the cost of sales and other costs directly required to earn the gross revenue, and the selling costs, general administrative costs and other business costs arising in that year.
What actually causes hesitation in affiliate work sits between those two. Home internet, electricity, a book bought for an article, a paid tool, a writer you outsourced to. How much of any of that is deductible, I am not going to decide here. Income scale and working patterns differ, and the determination belongs to a tax office or a tax professional.
There is still something to do before the year ends: keep the payments you are unsure about, while you are still unsure. Dropping something is a decision you can make in February. A record you never kept is not something February can produce.
Date, amount, and what it was for. Three lines in a phone note. I deliberately do not write a verdict — no "business" or "personal" label — only the facts. For example: "12 Sep / ¥3,200 / one-month paid plan, to compare it inside the article." Whether that line exists is the difference between being able to explain the split in February and not.
Incidentally, those notes turned out not to be only for tax. Six months of them shows you what you spent money on and what you actually published. Reading mine back last year, I cancelled two tools I was still paying for and had never once used in a post.
Keep the evidence in the form someone might ask for it
Affiliate records are almost entirely electronic: the commission statement in the dashboard, the payment notice email, the deposits in a bank statement. Very little of it arrives on paper.
The NTA's electronic books and records portal notes that where you exchange electronic data containing the transaction information normally written on a transaction document, the obligation to preserve that data and the way it must be preserved are also set out in the Electronic Books Preservation Act — and that people who are preservation-obligated under the Income Tax Act or Corporation Tax Act should pay particular attention to "electronic transactions." Whether you fall into that category depends on your circumstances, so again, no determination here.
Separately from the obligation, though, there is a practical problem: how far back a dashboard lets you look is not your decision. How many months a platform will display is a product decision, product decisions change, and platforms shut down.
So I settled on one thing a month. At month end I export the statement as a PDF, name it so it starts with the year and month — "2026-09_commission-statement.pdf" — and drop it in the one folder. Under five minutes. Twelve of those and the year's evidence is in my hands rather than someone else's.
One more thing that changes how you build the folder: the retention periods are longer than people assume. No.2080, on record-keeping for white-return filers, lists them like this.
| What has to be kept | Retention |
|---|---|
| Books recording revenue and necessary expenses (statutory books) | 7 years |
| Other books prepared for the business (optional books) | 5 years |
| Inventory lists and other documents prepared for the accounts | 5 years |
| Invoices, delivery notes, shipping notes, receipts and similar documents prepared or received for the business | 5 years |
For blue-return filers, No.2070 on the blue return system says books and documents are to be kept for seven years as a rule, with some documents allowed five. Either way this is measured in years, not months. Cut the folders by year and put only that year's material inside, and the unit you search in later matches the unit the rule is written in.
Miscellaneous income and business income expect different amounts of record
Whether affiliate commissions are zatsu shotoku (miscellaneous income) or jigyo shotoku (business income) is covered in our tax and filing basics piece. Here I only want one point from it: the classification and the records are connected.
The note to Income Tax Basic Directive 35-2, on the NTA's page for Article 35 (Miscellaneous Income), reads as follows.
Whether income is recognised as business income is judged by whether the activity that produces it is carried on to the degree that it would socially be called a business. It adds that where there are no books or documents recording the transactions for that income — other than where the revenue from it exceeds ¥3 million and there are facts supporting recognition as business income — the income is to be treated as miscellaneous income from a business-like activity.
People read that in more than one way, but at minimum, whether books and documents are kept shows up directly inside the classification question. Records are not a nice-to-have sitting downstream of it. They sit in front of it.
There is also a line where keeping records becomes an obligation. No.1500 Miscellaneous income states that from the 2022 tax year onward, someone with miscellaneous income from a business-like activity whose revenue from that activity two years earlier exceeded ¥3 million must keep documents relating to cash and deposit transactions. The same page says that where that figure from two years earlier exceeds ¥10 million, a filed return has to be accompanied by a statement of revenue and expenses. Below ¥3 million, a cash-basis simplification is available instead.
The part worth noticing is that the test runs on revenue from two years earlier. A big year now puts you on the obligated side not this filing but the one two years out. Decide "I'm not in scope, so I don't need records" and you arrive at that year with nothing behind you.
One more thing that routinely gets blurred together. The NTA leaflet from September 2022, "Additional tax is heavier for businesses that have not prepared and kept books on sales", explains a measure under which the rate of additional tax is increased by up to 10% where a tax audit finds that sales books were not kept, or that entries for sales were inadequate. It applies to income tax and other taxes whose statutory filing deadlines fall on or after 1 January 2024. But the parties the leaflet lists are individual businesses carrying on activities generating business income, real estate income or timber income; corporations; and consumption-tax taxable enterprises. People with miscellaneous income alone are not on that list. You will see articles saying "no books means heavier additional tax for anyone" — that is not what this leaflet says. Which side you are on is worth checking on the page itself.
What 31 December closes, and what 15 March closes
Two deadlines, doing different jobs.
31 December
The cut-off for the year's income. Once the year has turned, "what was that payment in September" is not a question you can go back and answer. That is the entire argument for doing this inside the year.
The ¥200,000 line
The most quoted and most carelessly handled number in Japanese side-hustle writing. The NTA's No.1900, on salaried people who must file, lists among them anyone whose total of the various income amounts, excluding employment income and retirement income, exceeds ¥200,000.
- It is written as an income amount — revenue after necessary expenses — not as money received
- It is about whether an income tax return is required. Resident tax is a separate system, handled in our piece on resident tax and ordinary collection
- No.1900 lists other conditions too, including employment income above ¥20 million and wages from two or more employers. Which one applies to you is fastest to settle by reading that page
The first point is what ties this back to record-keeping. If the test runs on the figure after expenses, then someone with no expense records cannot calculate whether they are over the line. My first year, I was eyeballing it from total deposits.
15 March
If the blue return is something you are considering, it has a deadline. No.2070 gives the filing deadline for the application for blue-return approval as 15 March of the year for which you want the approval, or within two months of starting up for a new business.
Translated: wanting the blue return from the 2027 tax year means filing by 15 March 2027, and for 2026 the date has already passed. So this is not a thing to do inside this year — it is a thing to decide early about next year. Whether the blue return is worth it depends on how much bookkeeping you are willing to carry, so I am not recommending it. But being the person who knows a deadline exists beats being the person who finds out afterwards.
Go look at the dashboard the records come out of
Deciding how to keep records goes faster once you have seen what the commission statement actually looks like. Kingfin's affiliate program is free to join and free to use, and the dashboard shows your conversion and commission history. Whether any commission arises, and how much, is not guaranteed. The trading service being promoted carries the risk of losing your principal.
Sign up freeThe checklist for the rest of the year
Everything above, in a form you can act on between September and December.
You do not need all six. If you add one thing before the year ends, make it the first. I split the accounts in my third year, and that was the year February went quiet. The thing that should have come first ended up last.
Frequently asked questions
Disclosure: This article is informational and educational content from Kingfin's English editorial team. It is not tax representation, tax advice, or a determination about any individual's tax position. The rules described were checked against National Tax Agency pages at the time of writing, but tax law is amended and published guidance is updated. Whether a given payment is a necessary expense, how income is classified, and whether a return is required all depend on the scale of someone's income, how they work, and the shape of their contracts. Confirm anything you intend to act on with your local tax office or a tax professional. Kingfin's affiliate program promotes OlympTrade, an FX and binary-options trading service that is not registered as a financial instruments business in Japan. Trading always carries the risk of losing your principal, and we cannot promise that anyone will definitely earn or that gains are guaranteed. Affiliate commissions are likewise not guaranteed and results vary from person to person; only ever trade with money you can afford to lose, and make your own decisions at your own responsibility.
