I have been looking at the overseas tax break down for Japan. Please correct me if I error as this stuff is hard to figure sometimes.. If you are working in Japan for a US company (up to 6 months) Japan will tax you at a rate of 10-20%. You will not pay local Japanese tax or into their SS system. Your tax status changes after 6 months in Japan. You will still pay US taxes on this income, however you can use Japan's taxes as a credit, up to the full percentage you would pay in the US. Per diem does not have to be declared as long as it is within the guidelines. However if your employer pays for your hotel room in lieu of per diem, then you must declare the fair market value (FMV) as income and pay taxes on it.
You can get up to $90,000 tax free overseas, subject to the host nation's tax laws, if you stay there 1 year and establish residency, i.e. you must stay there 330 days out of 12 months. Now if you go to Japan in June and you plan on staying for more than a year, you will have to apply for a tax entension to qualify. You can get an extension for up to 30 days past your expected one year point.
Any overseas gurus?