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Tax Exemption (US Citizen)
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Gorf



Joined: 25 Jun 2011

PostPosted: Thu Mar 29, 2012 9:29 am    Post subject: Reply with quote

isitts wrote:
Didn't I already answer your question somewhere else? Wink I don't know what you do with with the unemployment income. I'd call the IRS or check their website on that. I'm still not clear what you mean by "pre-taxed". You mean you receive the money before it's taxed or tax is deducted from it before you receive it? Anyway, I would imagine you still have to file for it somehow. Turbotax doesn't walk you through that?

As for the rest of your question, pretty sure it's answered between pages 4 and 6 on this thread. Look at the posts by naturegirl.

What kind of school do you work for? Public? Hagwon? If public, not sure why they don't know what to do with your residency certificate. If hagwon, the certificate is useless and will be taxed in Korea.

Edit: And how do I file for an extension?
In either case, you'll be filing a 1040, 2555 (no EZs), and two extentions (to fullfill the physical presence test). You don't need W-2s to file your taxes.

*note: The basic (free) version of turbotax doesn't have a 2555 form.*


By pre-taxed I mean they took the taxes out before they sent it to me so that I didn't have to bother with it later.

I work for an after school program. It's a company that works in conjunction with the elementary school. On paper, I work for the school, but the school has a separate contract with my company and I'm paid and organized by them. I don't know who the hell to give the form to, and again, what the hell is supposed to happen with it? What do they do with it? How will I need it? What's the point of giving them this form, other than to just have it on record? Will they give me back some kind of document I need? I can't get an answer on this from anyone, all anyone says is to give it to them.

What are some online options that I can use to do my taxes where I can fill out the necessary forms, including the 2555 and 1040? I know Taxslayer is the most popular, but how do I pay for it? I'm not scared of pirating software if necessary, but I'd prefer to do it online instead of printing a bunch of stuff.

Also, due to the nature of my work, since after school programs are kind o shady, it might be possible that there is no paper trail to my work here in Korea. If that was the case, I would just file 1040 and say I earned no money last year, right?
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isitts



Joined: 25 Dec 2008
Location: Korea

PostPosted: Thu Mar 29, 2012 8:35 pm    Post subject: Reply with quote

Gorf wrote:
By pre-taxed I mean they took the taxes out before they sent it to me so that I didn't have to bother with it later.


Ok, so you donít have to pay tax on your unemployment since thatís been taken out. Not sure how to file it but since the taxes are paid, may not be a big deal. Iíd still check the IRS website to check how to file that.

Quote:
I work for an after school program. It's a company...


Then you donít work for a public school. You work at a public school. You work for a private company, on paper and in actuality. Effectively, you work for a hagwon that is using the public schoolís facilitiesÖwhich means your residency certificate is useless. The two year exemption from Korean taxes doesnít apply to you. Thatís why no one knows what to do with your certificate because thereís nothing for anyone to do with it. You pay Korean taxes.

Quote:
Also, due to the nature of my work, since after school programs are kind o shady, it might be possible that there is no paper trail to my work here in Korea. If that was the case, I would just file 1040 and say I earned no money last year, right?


No. You still file your 1040 and report your Korean-earned income under ďother incomeĒ (on line 41 or thereabouts). And you file a 2555 for the foreign earned income exemption (so that you donít owe taxes to the US on your income earned in Korea).

(You should also file two extensions so that you are qualified to file the 2555 under the physical presence test. Two extensions allow you to file your taxes in June. Though...since you are paying taxes in Korea, you might also qualify for the exemption under the bona fide residence test and/or list Korea as your tax home.)

Iíve said this stuff already! Smile And Iíve told you where to look for your answers. Read what's on here! Actually read it! Wink
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Gorf



Joined: 25 Jun 2011

PostPosted: Fri Mar 30, 2012 9:38 am    Post subject: Reply with quote

Actually, I think my deal is sealed. On paper I work for the school (they sponsor my visa, even in my passport it says I work at the pubic school, and as far as the government knows, I work for them) and the school has a separate, entirely non-goernmental contract with the school where the administer me and my coteacher. Like I say, it's shifty. I can get the tax exemption if I file for the extension, but I won't have to because as far as the school is concerned and Korean taxes, I am sponsored by the school, but they themselves have paid me 0 won so far, and the paper trail stops at my after school company as well because they do the double bank book scam.

Anyways, it's all kind of moot because since I'm 24, my mom is going to claim me on her taxes as a dependent, so on my taxes I'll be checking that I'm dependent and that I've been living with her the past year and simply earned no income. I'm basically a ghost, living in Korea yet on paper I am still living at my mom's house and earned no money last year aside from unemployment. I just file for that and on my taxes, put all zeros and I'm good to go.
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isitts



Joined: 25 Dec 2008
Location: Korea

PostPosted: Fri Mar 30, 2012 6:50 pm    Post subject: Reply with quote

Gorf wrote:
Actually, I think my deal is sealed. On paper I work for the school (they sponsor my visa, even in my passport it says I work at the pubic school, and as far as the government knows, I work for them) and the school has a separate, entirely non-goernmental contract with the school where the administer me and my coteacher. Like I say, it's shifty. I can get the tax exemption if I file for the extension, but I won't have to because as far as the school is concerned and Korean taxes, I am sponsored by the school, but they themselves have paid me 0 won so far, and the paper trail stops at my after school company as well because they do the double bank book scam.

Anyways, it's all kind of moot because since I'm 24, my mom is going to claim me on her taxes as a dependent, so on my taxes I'll be checking that I'm dependent and that I've been living with her the past year and simply earned no income. I'm basically a ghost, living in Korea yet on paper I am still living at my mom's house and earned no money last year aside from unemployment. I just file for that and on my taxes, put all zeros and I'm good to go.


Fair enough. Then I'm not sure why they don't know what to do with your certificate. But the public school you work for should know. Like, the school accountant should know.

Is there anything in your contract that says anything about it? I'm in a GEPIK school and my contract mentions giving my school the residency certificate. I mention this because the contract will explain it in Korean.

Whose jurisdiction is your school under? EPIK? GEPIK? SMOE? Even if you don't directly work for them, maybe you could call one of the coordinators and ask them about it.

Anyway, presuming you get the certificate worked out, you won't owe taxes in Korea. It protects you from double taxation (paying taxes in the US and Korea). By giving your school that certificate, you're telling them that America is your tax home, so you don't owe Korea any tax.

But it also means that you do owe tax to America (unless you file the 2555 under the physical presence test). I don't see how it's necessary or helpful to file as a dependent if your unemployment was pre-taxed. And you're not a dependent here.

It's really not that hard to file a 1040 and 2555. Turbotax would walk you through it (you'd have to get a paid version to get the 2555 form).

You may be a ghost now, but if/when you return to the states and start filing on your own, the IRS may wonder where your previous returns went. But, whatever you want to do.
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Icewontolla



Joined: 08 Dec 2010

PostPosted: Wed Apr 04, 2012 6:00 am    Post subject: Reply with quote

Okay one quick question.

1. Do I have to file the 2555 since I've never had more than 10,000 in my bank at one time?

Also I've seen turbotax mentioned, is that the expat efile of choice? I tried a separate one but it didn't allow for foreign addresses.
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isitts



Joined: 25 Dec 2008
Location: Korea

PostPosted: Mon Apr 09, 2012 6:26 am    Post subject: Reply with quote

Icewontolla wrote:
Okay one quick question.

1. Do I have to file the 2555 since I've never had more than 10,000 in my bank at one time?

Also I've seen turbotax mentioned, is that the expat efile of choice? I tried a separate one but it didn't allow for foreign addresses.


The 2555 has nothing to do with the 10,000 in your bank. That's a different form.

The 2555 is claiming exemption from being taxed on your foreign earned income.
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Los Angeloser



Joined: 26 Aug 2010
Location: Korea

PostPosted: Sun Apr 15, 2012 6:28 pm    Post subject: Reply with quote

It appears as though you could be get a free pass if you haven't been filing your taxes in the past - Information for U.S. Citizens or Dual Citizens Residing Outside the U.S.
http://www.irs.gov/newsroom/article/0,,id=250788,00.html
"The IRS is aware that some taxpayers who are dual citizens of the United States and a foreign country may have failed to timely file United States federal income tax returns or Reports of Foreign Bank and Financial Accounts (FBARs), despite being required to do so. Some of those taxpayers are now aware of their filing obligations and seek to come into compliance with the law. This fact sheet summarizes information about federal income tax return and FBAR filing requirements, how to file a federal income tax return or FBAR, and potential penalties."

I filed an extension so I can maybe have time to do the above before it's too late or they come after me like Wesley Snipes.
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Triple007



Joined: 29 Nov 2010

PostPosted: Tue Oct 16, 2012 1:56 pm    Post subject: Reply with quote

I am preparing to go to Korea for the second time in December. I was at a school that I don't think did everything by the book. I paid about 15,000won a month in taxes so I didn't really complain or think about being exempt. This next year I have talked to my school and will pay a little more. (Much more by the book school.) I was wondering can I start gathering my information earlier and submit the forms for next year? I was reading that I couldn't apply for a future year. What would you guys suggest? My school will be taking about 80,000 out of my paycheck a month and would love to not have to pay it.
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Triple007



Joined: 29 Nov 2010

PostPosted: Tue Oct 16, 2012 2:12 pm    Post subject: Reply with quote

Also the new form costs 85 dollars to file.
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Triple007



Joined: 29 Nov 2010

PostPosted: Wed Oct 17, 2012 2:37 pm    Post subject: Reply with quote

I'm confused about getting the form 6166 to apply for next year. I will be going to Korea on or around December 10, 2012. I don't want to pay taxes for 2013. Do I have to wait until 2013 to file it or can I file it for the previous tax year (2011) and still have that foreign residency apply to the taxes I make in Korea in 2013. I am really confused. Please PM me or reply to this message if you can help.

Thanks.
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Triple007



Joined: 29 Nov 2010

PostPosted: Thu Oct 18, 2012 12:56 pm    Post subject: Reply with quote

I have had my questions answered. Also a lot of people are talking about Hagwons not accepting this, but I have found this to not be the case with larger hagwons.
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ulmaeri



Joined: 26 Sep 2007

PostPosted: Thu Dec 06, 2012 2:22 am    Post subject: Reply with quote

With the new year, does anyone know if we are still able to file just the last three years from 2010 to 2012, or does it need to be from 2009?

Last edited by ulmaeri on Thu Jan 03, 2013 3:42 am; edited 1 time in total
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karenology



Joined: 20 Jul 2010
Location: Gwangju City, Gyeonggi-do

PostPosted: Tue Dec 18, 2012 2:13 am    Post subject: Reply with quote

So my school didn't withhold any Korean taxes this whole time I've been here, which is over two years, assuming I could get this form easily. Months ago -- February, in fact -- I applied for an 8802 form from the IRS to show I'm a U.S. citizen. I didn't think about it until November, when my school told me they still haven't received that form. I again applied for the form, and called and badgered the IRS about it, and still no form. I'm getting ready to leave in a week, and now the school is saying I will have to pay back the taxes. Fair enough; I just figured I'll pay them and get a refund. But then my co-teacher says to me that I owe a total of over 6 million won (!!!)

What can I do? I don't even *have* 6 million won. I've confirmed from my co-teacher that this wasn't a translation error (as I thought before when she told me this amount, maybe she was getting "ten thousand" and "million" confused) - nope, the secretary ladies had called some tax office in Korea and confirmed that amount. I've asked around and no foreigner I've talked to has had to pay anywhere near that amount. Has anyone dealt with this situation, and what did you end up doing? I'm going to call the IRS and badger them yet again in three hours...augh...
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MrsGaeul



Joined: 14 May 2013

PostPosted: Fri May 17, 2013 12:45 pm    Post subject: Reply with quote

So you can only be exempt if you work for a public school? I'm thinking about working for an international school and was really hoping to claim exemption.
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