What counts as a necessary expense, how to split mixed personal-business costs, and how equipment is written off.
Deduct costs that are genuinely for the business, keep the evidence, and split mixed personal-business costs (home, phone, car) on a reasonable, documented basis; larger equipment is depreciated over time.
A necessary expense is a cost incurred to earn your business income: supplies, software subscriptions, professional fees, travel to clients, communication, and the like. The test is business purpose, and the burden is on you to show it, so keep receipts and invoices, retain electronic transaction data under the storage rules, and note why a cost was for the business when it is not obvious. Cloud accounting makes this easier by attaching imported transactions to categories, but it does not judge whether a cost is genuinely business-related — that is your call.
For costs that serve both your life and your work — home rent and utilities, a phone, a car — you deduct only the business share (家事按分). Use a reasonable, repeatable basis such as floor area for a home office or a usage-time ratio for a phone, write down the method, and apply it consistently. Revisit the split after a move or a change in how you work.
A cheap tool is expensed the year you buy it, but bigger purchases are spread over their useful life through depreciation rather than deducted all at once. There are special rules for smaller assets — including a threshold below which an item can be fully expensed, and a special allowance that lets blue-return filers immediately expense assets up to a higher per-item limit, subject to an annual cap. These thresholds and the useful-life tables are set by the NTA and change, so check the current figures before deciding how to book a laptop, camera, or desk.
The practical habit is simple: record what you bought, when, for how much, and its business-use ratio. Your accounting software will apply the depreciation schedule, but only if you enter the asset correctly and keep the purchase evidence.
Cloud accounting software · freee K.K.
Beginner-friendly cloud accounting built around guided workflows, popular with sole proprietors for blue-return filing and e-Tax.
Fees: Subscription plans (monthly/annual) vary by tier — verify current pricing.
Cloud accounting software · Money Forward
Cloud accounting with strong automation and integrations, popular with freelancers and small companies that value flexible bookkeeping.
Fees: Subscription plans vary by tier — verify current pricing.
Accounting software · Yayoi K.K.
A long-established accounting-software brand with desktop and cloud options, widely used and supported by tax professionals.
Fees: Desktop license or cloud subscription depending on product — verify current pricing.
Any cost genuinely incurred to earn your business income — supplies, software subscriptions, professional fees, client travel, and communication — is deductible if you keep the receipt and can show the business purpose. Costs that serve both life and work (home rent and utilities, phone, car) are split by a reasonable, documented ratio (家事按分), such as floor area or usage time. Cheap tools are expensed at once, but bigger equipment is depreciated over its useful life; small-asset thresholds and useful-life tables are set by the NTA and change, so confirm current figures.
The blue return is a filing status that rewards proper bookkeeping. With double-entry books filed electronically, you can deduct up to ¥650,000 from your income, carry losses forward for three years, and deduct family salaries. The trade-off is more disciplined recordkeeping — which cloud accounting software largely automates. For most freelancers with steady income, the tax saving clearly outweighs the effort.