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Tax Exemption (US Citizen)
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naturegirl321



Joined: 18 Jul 2006
Location: Suwon

PostPosted: Thu Jun 24, 2010 8:42 pm    Post subject: Reply with quote

warmachinenkorea wrote:
No it's not. When did I ever equate the two?

Would you report earnings from a back-room poker game on your W-2?


Because they're both illegal. Selling drugs or teaching privates in KOrea, both illegal

From a legal standpoint, yes, you SHOULD. Whether or not people do is another matter. Question for you: would you report earnings from a poker game? What about winning in vegas? Because there are forms for winning in gambling.
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warmachinenkorea



Joined: 12 Oct 2008

PostPosted: Thu Jun 24, 2010 8:52 pm    Post subject: Reply with quote

"back room" poker game these are illegal.
In Vegas gambling is legal. Yes you should report. Gambling is not legal in every state in the US.

Anybody that would report to a government something they've done that is illegal shouldn't be allowed to pro-create.

People shouldn't do things that are illegal anyway.
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naturegirl321



Joined: 18 Jul 2006
Location: Suwon

PostPosted: Thu Jun 24, 2010 8:58 pm    Post subject: Reply with quote

True, you're right, still. So if people do illegal things to get money, should they then do the legal thing and report it on their IRS?
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hypnotoad777



Joined: 05 Apr 2010

PostPosted: Thu Jun 24, 2010 9:08 pm    Post subject: Reply with quote

naturegirl321 wrote:
warmachinenkorea wrote:
Quote:
YOu're talking about reporting privates on an E2, you mean reporting on your IRS forms or reporting to the K govt?
I think reporting any income earned illegally to anybody would be a bad idea.

Quote:
Because it's illegal? And you could potentially incur some blowback from the IRS if you don't? Pretty sure that's why everyone else does it. No one's telling you to do anything. This is just what is legally required.


Another Question


I'm pretty sure the US govt doesn't care if it's legal or not, as long as it's reported. Then if it's illegal, they'll arrest you for something else. But teaching privates isn't the same as selling drugs.


I was saying not reporting earnings was illegal, as an explanation for why everyone else is doing it (in response to warmachine's "why should I do this?" statement). Not talking about "illegal earnings."
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warmachinenkorea



Joined: 12 Oct 2008

PostPosted: Thu Jun 24, 2010 9:19 pm    Post subject: Reply with quote

I see where the problem is.

I was asking why should I report my Korean taxes to the Korean Gov? I don't pay any Korean taxes. I've been here 2 years and where I live no one cares about English much less privates.
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hypnotoad777



Joined: 05 Apr 2010

PostPosted: Thu Jun 24, 2010 9:42 pm    Post subject: Reply with quote

warmachinenkorea wrote:
I see where the problem is.

I was asking why should I report my Korean taxes to the Korean Gov? I don't pay any Korean taxes. I've been here 2 years and where I live no one cares about English much less privates.


Correct, I was not talking about you filing taxes to Korea. I was talking about American taxes which you are legally supposed to to file, even if you ultimately are exempted from them.
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warmachinenkorea



Joined: 12 Oct 2008

PostPosted: Thu Jun 24, 2010 9:45 pm    Post subject: Reply with quote

I stated a long time ago that I file with Turbo Tax. I file in the US.
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hypnotoad777



Joined: 05 Apr 2010

PostPosted: Thu Jun 24, 2010 9:59 pm    Post subject: Reply with quote

warmachinenkorea wrote:
I stated a long time ago that I file with Turbo Tax. I file in the US.



Right, but you were saying you didn't pay any Korean taxes even though you didn't submit your Certificate of Residency, and that the reason you don't get taxed is that you live in a rural area where your employers took your word for it. In order to file with the U.S. the IRS requires that we submit the Certificate of Residency. I'm not saying it's going to come back to bite you in the ass. I'm just going to do it to be on the safe side.
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warmachinenkorea



Joined: 12 Oct 2008

PostPosted: Thu Jun 24, 2010 10:10 pm    Post subject: Reply with quote

Again I filled with Turbo Tax I must disclose all the info on the form. I did stated my wife and I live in Korea. I stated how much we made. I passed the residency test. IT has nothing to do with US taxes it has evything to do with the Korean taxes.

I filled my 2008 return through turbo tax and even got a return on my 2007-2008 US income. I reported my Korean income there too.

The residency form is only to show the Korean Gov that you are a resident of the US. Your passport should do the same thing but it's jsut BS paper work you pay for.
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hypnotoad777



Joined: 05 Apr 2010

PostPosted: Thu Jun 24, 2010 10:27 pm    Post subject: Reply with quote

warmachinenkorea wrote:
Again I filled with Turbo Tax I must disclose all the info on the form. I did stated my wife and I live in Korea. I stated how much we made. I passed the residency test. IT has nothing to do with US taxes it has evything to do with the Korean taxes.

I filled my 2008 return through turbo tax and even got a return on my 2007-2008 US income. I reported my Korean income there too.

The residency form is only to show the Korean Gov that you are a resident of the US. Your passport should do the same thing but it's jsut BS paper work you pay for.


The whole point in presenting the residency form, from what I've been told by a few sources now, is so you don't get taxed (once it goes through) as opposed to getting taxed and applying for a refund. Even if it is a completed refund, I would rather not get taxed at all. Perhaps your school took your word for it, and didn't tax you at all without the form. However, I've heard several people now say that they had to submit the residency form to stop the taxes being drawn out (and subsequently refunded) and just get their full paycheck. I guess you're one of the lucky ones.
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naturegirl321



Joined: 18 Jul 2006
Location: Suwon

PostPosted: Thu Jun 24, 2010 11:06 pm    Post subject: Reply with quote

hypnotoad777 wrote:
warmachinenkorea wrote:
I stated a long time ago that I file with Turbo Tax. I file in the US.


Right, but you were saying you didn't pay any Korean taxes even though you didn't submit your Certificate of Residency, and that the reason you don't get taxed is that you live in a rural area where your employers took your word for it. In order to file with the U.S. the IRS requires that we submit the Certificate of Residency. I'm not saying it's going to come back to bite you in the ass. I'm just going to do it to be on the safe side.


It might be because he's in a PS. Mine automatically did it when I was in a public school.
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kcweaver



Joined: 29 Dec 2008
Location: Paju City

PostPosted: Sat Jun 26, 2010 3:24 am    Post subject: Reply with quote

The best way to get answers at least on the American side is to go to IRS's website. They have a booklet on US tax treaties and foreign earned income.

According to US law, ALL Americans, no matter where they live in the world MUST report their world-wide income to IRS, unless it does not meet a threshold. I think that threshold is the amount you would receive as a standard deduction.

If you pass the bona fide residence test or the physical presence test, you are allowed to exempt @ $94,000 from your income. Anything above that you may have to pay taxes.

I believe the treaties are to prevent DOUBLE taxation. And according to the tax treaty the institution that you work for must be government accredited, i.e. public schools and universities. Hagwons are not accredited. So, if you get a certificate of residence you might be liable to pay tax to Uncle Sam, but not to Korea.

Also, some states do not care if there is a tax treaty between Korea and the US. This treaty only deals with Federal taxes and Korean taxes, not the individual states. For example, if you are a California resident, you MUST report your world-wide income to California. There are no foreign earned income exemptions. Since most of the teachers in Korea are making above the poverty line, a California teacher will probably owe some money to California. (They need it badly!) Check with your state! If you vote in California, change your residency. Smile

Most of the thread is in error. The best bet is to go to the law and not to wannabe tax lawyers. (Btw, I studied tax law after law school.)
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naturegirl321



Joined: 18 Jul 2006
Location: Suwon

PostPosted: Sat Jun 26, 2010 8:57 pm    Post subject: Reply with quote

kcweaver wrote:
According to US law, ALL Americans, no matter where they live in the world MUST report their world-wide income to IRS, unless it does not meet a threshold.

If you pass the bona fide residence test or the physical presence test, you are allowed to exempt @ $94,000 from your income. Anything above that you may have to pay taxes.

True, you should file taxes every year, the limit was 91,400 for the past year though, not 94K : And while it is meant to prevent double taxation, there is a loophole to get out of both taxes for two years, and it's legal.
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eljuero



Joined: 11 Aug 2009

PostPosted: Mon Jun 28, 2010 4:31 am    Post subject: Address question Reply with quote

Thanks for this info - by the way, have people recieved the IRS forms directly here in Korea or should I have the certificate go to my sister's for forwarding?
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naturegirl321



Joined: 18 Jul 2006
Location: Suwon

PostPosted: Mon Jun 28, 2010 5:35 am    Post subject: Reply with quote

YOu can receive stuff here, no probs
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