The tax year for personal income tax runs from 1 January to 31 December. If you're employed as a regular company employee, you should get something called a gensen (the whole name is somewhat more involved but everyone knows what you're talking about if you just say "gensen") that looks a lot like a W-2. I usually just tack that onto my 1040 when I file my US taxes. So far, the IRS has never complained. You can usually use a single average exchange rate to convert everything to dollars.

A regular company employee can have the company do all the paperwork and calculations, which usually results in an adjustment on your December paycheck. But if you have certain types of income (like stock gains) or exceed a maximum salary limit (which is actually fairly high), you have to file the forms yourself. I do it myself anyway because, compared to the US tax forms, the Japanese forms are a breeze. There's even English instructions the government can send you.

For anyone who is getting side-benefits like paid housing or cost-of-living payments, tax equalization is a good idea. But it's complex so you really should get the company's accounting firm to do the grunt-work. Equalization basically says that you pay your company the same amount in tax that you would have paid had you never left Japan and the company pays the *real* tax both in the US and in Japan.

But... for someone coming over with very little benefits other than a job, tax equalization can work against you, too. The reason is like Synthia said... you can lob of about $80K of income from your US tax just for living outside the country. So, in many cases, your combined Japanese and US tax will be lower than your combined US and State taxes (sometimes the State you lived in before will probably try to claim tax jurisdiction over you but, technically, you really don't have to pay tax to a State in which you neither live nor work).

Also... if your long-term plan is to remain in Japan, or if you quit and find a local job while you're here, the tax equalization will make your tax return a miserable mess for the next several years.

There is a much simpler plan than equalization which doesn't require high-priced accountants to figure out. Ask your employer if they can simply do a gross-up. If they're giving you... oh... $2K per month for housing, they'd simply give you an extra $500 or so to cover the tax on the $2k. You can sell that to many medium size companies (who don't already have solid ex-pat policies in place) because: (a) they'd have to pay the $500 anyway, and (b) under tax equalization, they'd end up paying an accountant another $500 to figure out how much they have to pay.

In short, I'd ask for tax preparation (arranged and paid for by the company) but consider either gross-up if you can sell it or paying your own Japanese/US taxes if your benefits are not huge -- rather than equalization.