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Tax Exemption (US Citizen)
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eoneinna



Joined: 05 Mar 2010

PostPosted: Tue Jun 15, 2010 5:18 am    Post subject: Tax Exemption (US Citizen) Reply with quote

I am a little confused as to how this works.

I send my application in, wait for my Residency Certificate to come in, and then hand it over to the school? That's it!?!?

Sounds too simple, am I missing a step where I have to fight a rabid bear, climb a large scale mountain on roller blades, then, with boxing gloves, dig 124 feet underground to uncover a box that holds my Residency Certificate.. .??


Oh and for those who need instructions:


INSTRUCTIONS FOR ESL TEACHERS FOR COMPLETING FORM 8802
(TAX EXEMPTION FORM -USA)

I. Go to below site to download form and instructions:
A. http://www.irs.gov/app/picklist/list/formsInstructions.html?value=8802&criteria=formNumber
B. Fill out form
i. Name
ii. SSN
iii. Line 2: Address (U.S. Permanent Address)
iv. Line 3: Korean Address
v. Line 4: Check appropriate boxes, “Individual” & “U.S. Citizen”
vi. Line 5: Check tax form that you submit (usually 1040)
vii. Line 7: List year you will be in Korea
1. You cannot list a future year, only the current year or previous years.
viii. Line 8: List previous tax season which this form will base its information
1. This would be the last tax year you submitted that was due on April 15th of the following year, for example:
A. If it’s January 2009 – your 2008 taxes are not due yet and even if you have already filed for 2008, you list 200712
B. If it’s May 2009 – your 2008 taxes have been due and filed, you list 200812
C. Basically, use April 15th as your starting point, any form submitted before April 15th, subtract 2 years. Anything after April 15th list the previous year.
ix. Line 9: Purpose of certification – check “Income Tax”
x. Line 10: List Penalties and Perjury statement:
1. This is needed if you are requesting certification for the current year (which is usually the case)
2. Statement should read:
A. This certification is given under penalties and perjury and to the best of my knowledge and belief, the statements are true, correct and complete.
B. "Applicant Full Name", SSN xxx-xx-xxx, is a U.S. resident and will continue to be throughout the current tax year.
C. Signed / Dated:
3. If you are applying for certification not as an individual, please see IRS instructions or call 215-516-2000
xi. Don’t forget to sign the Penalties and Perjury statement AND at bottom of form!!
xii. LAST PAGE:
1. Fill in Applicant name, SSN and Year for Certificate at the top of the page
2. Line 11:
A. Select country you will be needed certificate for and put the requested number of forms you are needing:
i. South Korea
1. $35 will get you 1-20 copies (suggested to order more than one in case you need copies later)
3. Line 12a
A. Total # of copies
4. Line 12c
A. Only fill out if you’re getting more than 20 copies
5. Line 13
A. Total amount to be paid
II. Payment
A. Send check / money order
B. Pay online
i. Go to www.irs.gov
ii. Enter e-pay in Search Bar
iii. Select first search result
iv. At bottom of E-Pay page, under Electronic Payments Options, click on “User Fees”
v. Then click on “U.S. Residency Certification (Form 8802)
vi. You will be directed off the irs.gov site to a payment site
1. Fill in form and make payment
A. IMPORTANT!
i. MAKE NOTE OF TRACKING / CONFIRMATION NUMBERS!! (You should also get a confirmation email as well)
ii. WRITE NUMBERS ON FIRST PAGE OF FORM 8802
1. There is a section on the first page of the form above “Applicants Name” named, “Electronic payment confirmation no.:”
A. Put both tracking/confirmation numbers here
III. Send Form
A. With check
i. Via Mail to:
1. Internal Revenue Service, P.O. Box 42530, Philadelphia, PA 19101-2530
B. With electronic payment
i. Via Mail to:
1. Internal Revenue Service, 11601 Roosevelt Blvd., Drop Point N322 – US Certs Dept., Philadelphia, PA 19154
ii. Via Fax to (***MUST BE WITH COVER LETTER/SPECIFY HOW MANY PAGES!***):
1. 215-516-1035
2. 215-516-2485
3. When faxing from Korea:
A. 001-1-215-516-1035
IV. Wait for forms to come!! 
1. Any questions, call this number and select the U.S. Residency option: 215-516-2000
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hypnotoad777



Joined: 05 Apr 2010

PostPosted: Sun Jun 20, 2010 11:40 pm    Post subject: Reply with quote

I have looked up so much info on this and I can't get a straight answer. When you file for tax exemption in Korea, you pay American taxes IN FULL? I don't understand why we can't just pay the 5 percent Korean tax versus the U.S.'s over 15 percent. I spoke with my coordinator and she told me paying Korean taxes is not an option, yet others have prescribed it. I'm so confused. Any help would be appreciated.
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perkxplosion



Joined: 18 Jan 2010
Location: gogo's. you know know.

PostPosted: Sun Jun 20, 2010 11:49 pm    Post subject: Reply with quote

My dad is a CPA and I had ran into this same problem during tax season earlier this year. He told me he needed records of my pay stubs. I asked my boss and he said he couldn't provide them and that he had never run into the situation before. It turned out it didn't matter any way. During your first year (possibly more, I'm not sure) you aren't required to show records of your pay. In fact, there are two tax refunds for working below poverty and in a foreign country. My tax return was a little over a thousand dollars thanks to those refunds. Hope this helps a little. I wish I could be more specific but I didn't do the tax work myself.
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hypnotoad777



Joined: 05 Apr 2010

PostPosted: Mon Jun 21, 2010 9:05 am    Post subject: Reply with quote

perkxplosion wrote:
My dad is a CPA and I had ran into this same problem during tax season earlier this year. He told me he needed records of my pay stubs. I asked my boss and he said he couldn't provide them and that he had never run into the situation before. It turned out it didn't matter any way. During your first year (possibly more, I'm not sure) you aren't required to show records of your pay. In fact, there are two tax refunds for working below poverty and in a foreign country. My tax return was a little over a thousand dollars thanks to those refunds. Hope this helps a little. I wish I could be more specific but I didn't do the tax work myself.


Thanks for the info. But what did you do about the residency certificate? Did you get one of those before you headed over? When you got there? My coordinator through EPIK said that I would need one to avoid double taxation (taxation by the U.S. and Korea). I'm wondering how you got tax refunds without applying for this document....
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naturegirl321



Joined: 18 Jul 2006
Location: Suwon

PostPosted: Tue Jun 22, 2010 3:56 am    Post subject: Reply with quote

http://forums.eslcafe.com/korea/viewtopic.php?t=175572
http://forums.eslcafe.com/korea/viewtopic.php?t=181383

They have info. I never actually GAVE them the residency cert. My mom scanned it, emailed it to me, and I forwarded it to my uni, no taxes for two years! Smile


If you file the US residency tax cert things, then
If you stay our of the US for 330 days or more, no Korean or US taxes
If you stay less than that, then you pay US taxes.

I was paying taxes for the first two months in Korea, then sent the email of my scanned tax cert, and got all my taxes refunded, and won't have any taxes taken out for the next two years.
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hypnotoad777



Joined: 05 Apr 2010

PostPosted: Tue Jun 22, 2010 9:04 am    Post subject: Reply with quote

Woah! Awesome! It took me 3 weeks to get that answer! Thank you so much nature girl! How long did it take you to get the certification? I owe you one. You surely deserve a prize for answering the question that no one else was able to.
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naturegirl321



Joined: 18 Jul 2006
Location: Suwon

PostPosted: Wed Jun 23, 2010 5:27 am    Post subject: Reply with quote

I believe about two months for the first response to get to my mom's house, then she scanned the letter that told me I had to write to them again swearing that I really was a US tax resident. Thank goodness last year I actually owed US taxes, those 58 bucks I paid are saving me big time. I haven't paid US taxes since 2002.

Not sure if your situation is the same as me, but if you didn't live in the US last year, then you'll probably have to follow the same steps I did. If you lived in the US, it should be easier.
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hypnotoad777



Joined: 05 Apr 2010

PostPosted: Thu Jun 24, 2010 1:25 pm    Post subject: Reply with quote

Yeah, I think it's just the 35 to get the letter from the IRS. So do you know what happens after 2 years? Do you pay American taxes in full? Or can you apply to pay Korean taxes?
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warmachinenkorea



Joined: 12 Oct 2008

PostPosted: Thu Jun 24, 2010 3:34 pm    Post subject: Reply with quote

If you are an American working in Korea then you shouldn't be paying any taxes to the US unless you make over 80,000 or 85,000 a year abroad. You shouldn't be paying Korean taxes for your first 2 years here.
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hypnotoad777



Joined: 05 Apr 2010

PostPosted: Thu Jun 24, 2010 3:39 pm    Post subject: Reply with quote

thanks war machine...but not what i asked. that was established. what happens AFTER the two years. who do you pay and how much?
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warmachinenkorea



Joined: 12 Oct 2008

PostPosted: Thu Jun 24, 2010 3:51 pm    Post subject: Reply with quote

Quote:
If you are an American working in Korea then you shouldn't be paying any taxes to the US unless you make over 80,000 or 85,000 a year abroad.


If you work in Korea for 100 yrs. and never make over 80,000 a year then you don't pay Uncle Sam. After 2 years you pay Uncle Kim.
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naturegirl321



Joined: 18 Jul 2006
Location: Suwon

PostPosted: Thu Jun 24, 2010 4:26 pm    Post subject: Reply with quote

hypnotoad777 wrote:
Yeah, I think it's just the 35 to get the letter from the IRS. So do you know what happens after 2 years? Do you pay American taxes in full? Or can you apply to pay Korean taxes?


After 2 years, as long as you fulfill the reqs in the 2555, then you don't pay US taxes. Still file, but don't pay. After two years, you pay Korean ones.
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naturegirl321



Joined: 18 Jul 2006
Location: Suwon

PostPosted: Thu Jun 24, 2010 4:27 pm    Post subject: Reply with quote

warmachinenkorea wrote:
If you are an American working in Korea then you shouldn't be paying any taxes to the US unless you make over 80,000 or 85,000 a year abroad. You shouldn't be paying Korean taxes for your first 2 years here.


Wrong on all accounts. First, it's 91,400 dollars. And second, you have to fulfill the reqs in the 2555 in order to get out of US taxes.

OH, and the no Korean taxes isn't automatic. You have to give your school the US form. Maybe for SOME situtaions, such as PS it's automatic, but I can tell you at uni level, it's not.
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warmachinenkorea



Joined: 12 Oct 2008

PostPosted: Thu Jun 24, 2010 4:47 pm    Post subject: Reply with quote

I've never turned in any from to anyone. I haven't paid Korean taxes for my first 2 years. My wife and I are about to start our 3rd contract so we will begin paying Korean taxes.

I've filed my taxes with Turbo Tax and talked to multiple ppl in the IRS. The limit might have changed from $80-85,000 it still more than a teacher here is gonna make in a year. Yea you must fulfill the resident test or the other thing. A public school or hagwon teacher should fulfill the 330 days.
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naturegirl321



Joined: 18 Jul 2006
Location: Suwon

PostPosted: Thu Jun 24, 2010 4:52 pm    Post subject: Reply with quote

warmachinenkorea wrote:
I've never turned in any from to anyone. I haven't paid Korean taxes for my first 2 years. My wife and I are about to start our 3rd contract so we will begin paying Korean taxes.

I've filed my taxes with Turbo Tax and talked to multiple ppl in the IRS. The limit might have changed from $80-85,000 it still more than a teacher here is gonna make in a year. Yea you must fulfill the resident test or the other thing. A public school or hagwon teacher should fulfill the 330 days.


Where were you working? hagwon? public school? uni? All I can say is that it's NOT automatic if you work at a uni. The PS I worked at, however, did process it automatically.

about the amount. Says here right in black and white that it's 91,400 . http://www.irs.gov/pub/irs-pdf/f2555.pdf . From what I've heard on Dave's, not sure if it's true, but people claim to make that much doing at one place, moonlighting at another, and doing privates.
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