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Paying taxes back home
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hyperlatina



Joined: 03 Oct 2006
Location: Suwon, Korea

PostPosted: Wed Oct 11, 2006 10:24 am    Post subject: Paying taxes back home Reply with quote

I'm sure this question has been posed many times, but I can't seem to find any links that still work.

I'm trying to find info on filing my income tax while I'm in Korea as well as how I would file for my earnings in Korea when I return for the following tax year.

Does anyone know if Americans are still required to pay taxes if they pay the income tax while in Korea?
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Snowkr



Joined: 03 Jun 2005

PostPosted: Sun Oct 15, 2006 5:06 pm    Post subject: Reply with quote

I went through this last year.

You should file a form 2555 or 2550,( I can't remember which but the IRS website will say)
That form exludes you from paying income taxes on your Korean income provided you stay in the country for a full year.

This is probably up to debate, but I think you still have to social security tax. I had to pay 1400.00 USD social security on my Korean income last year and I was not happy. Other Americans said they didn't do this but I don't think you're meant to get around it.

As for income taxes, H&R Block in Seoul is really good with helping out teachers from the states.
Good luck!
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jangsalgida



Joined: 11 Jan 2006

PostPosted: Sun Oct 15, 2006 7:54 pm    Post subject: Reply with quote

Snowkr wrote:
I went through this last year.

You should file a form 2555 or 2550,( I can't remember which but the IRS website will say)
That form exludes you from paying income taxes on your Korean income provided you stay in the country for a full year.

This is probably up to debate, but I think you still have to social security tax. I had to pay 1400.00 USD social security on my Korean income last year and I was not happy. Other Americans said they didn't do this but I don't think you're meant to get around it.

As for income taxes, H&R Block in Seoul is really good with helping out teachers from the states.
Good luck!


What if I haven't filed in a few years, am I still excluded?
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princess



Joined: 16 Jan 2003
Location: soul of Asia

PostPosted: Mon Oct 16, 2006 2:35 pm    Post subject: Reply with quote

jangsalgida wrote:
Snowkr wrote:
I went through this last year.

You should file a form 2555 or 2550,( I can't remember which but the IRS website will say)
That form exludes you from paying income taxes on your Korean income provided you stay in the country for a full year.

This is probably up to debate, but I think you still have to social security tax. I had to pay 1400.00 USD social security on my Korean income last year and I was not happy. Other Americans said they didn't do this but I don't think you're meant to get around it.

As for income taxes, H&R Block in Seoul is really good with helping out teachers from the states.
Good luck!


What if I haven't filed in a few years, am I still excluded?
Yeah, I'd like to know about this, too.
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hyperlatina



Joined: 03 Oct 2006
Location: Suwon, Korea

PostPosted: Tue Oct 17, 2006 5:40 am    Post subject: Reply with quote

thanks for the info!!
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huffdaddy



Joined: 25 Nov 2005

PostPosted: Tue Oct 17, 2006 6:35 am    Post subject: Reply with quote

Snowkr wrote:

This is probably up to debate, but I think you still have to social security tax. I had to pay 1400.00 USD social security on my Korean income last year and I was not happy. Other Americans said they didn't do this but I don't think you're meant to get around it.


Did you pay into the SK pension plan? I believe we are exempt if we contribute to the pension plan here.

I just emailed the SSA to ask them about this.



ustaxtag
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huffdaddy



Joined: 25 Nov 2005

PostPosted: Tue Oct 24, 2006 12:45 am    Post subject: Reply with quote

huffdaddy wrote:

I just emailed the SSA to ask them about this.



And here is the response:

Quote:
Thank you for your inquiry.

Your work overseas may help you to qualify for U.S. benefits if it was covered under a foreign Social Security system.

The United States has Social Security agreements with a number of other countries. One of the main purposes of these agreements is to help people who have worked in both the United States and the other country, but who have not worked long enough in one country or the other to qualify for Social Security benefits.

Under the agreement, we can count your work credits in the other country if this will help you qualify for U.S. benefits. However, if you already have enough credits under U.S. Social Security to qualify for a benefit, we will not count your credits in the other country.

If we have to count your foreign work credits, you will receive a partial U.S. benefit that is related to the length of time you worked under U.S. Social Security. Although we may count your work credits in the other country, your credits are not actually transferred from that country to the United States. They remain on your record in the other country. It is therefore possible for you to qualify for a separate benefit payment from both countries.

For more information about the agreements, including details about specific agreements in force, see http://www.socialsecurity.gov/international/.


Which means..?????
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Sash



Joined: 08 Aug 2006
Location: farmland

PostPosted: Tue Oct 24, 2006 7:29 am    Post subject: Reply with quote

For the tax exclusion form:

http://www.irs.gov/formspubs/lists/0,,id=97817,00.html

Scroll down to form 2555 and download to PDF files.
Not sure about social security though.
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jmbran11



Joined: 19 Jan 2006
Location: U.S.

PostPosted: Tue Oct 24, 2006 5:43 pm    Post subject: Reply with quote

Huffdaddy,
Your response seems to indicate that Americans may be able to get some "credit" for working in Korea towards the U.S. benefits that you receive when you retire there (i.e. I need X credits to qualify to receive S.S. at retirment age, and my time working in Korea may count toward accumulating this number of credits). Credits are determined by the amount of time you are employed (I think by quarters?).

However, it doensn't tell you anything about whether or not you need to pay your social security deduction to the government, which is what is paying the current retirees' benefits. I think this is technically different from income taxes, which are what we are exempt from, but I don't know if it is the IRS or the SSA who has authority over enforcement of the required deductions. I'll do some research over the weekend.


Last edited by jmbran11 on Wed Oct 25, 2006 8:09 pm; edited 1 time in total
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princess



Joined: 16 Jan 2003
Location: soul of Asia

PostPosted: Wed Oct 25, 2006 2:38 pm    Post subject: Reply with quote

I don't think people in their 20s and 30s need to worry about social security for 2 reasons.

1. People in this age range will NEVER receive SS benefits. SS will be wiped out in 30+ years.

2. The world may not even be here by then anyways. I hope not anyways.
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JeJuJitsu



Joined: 11 Sep 2005
Location: McDonald's

PostPosted: Wed Oct 25, 2006 2:58 pm    Post subject: Reply with quote

princess wrote:


2. The world may not even be here by then anyways. I hope not anyways.


1. You're a nut.
2. Please, just off yourself already.
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bellum99



Joined: 23 Jan 2003
Location: don't need to know

PostPosted: Wed Oct 25, 2006 3:17 pm    Post subject: Reply with quote

He has a point about people in 20's and 30's. If you are counting on old age pension when you are retiring then you are an idiot. You have ample time to go home and put in your years. Why are you worried about a few years missing......?
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bewolff



Joined: 07 Jan 2007

PostPosted: Fri Mar 10, 2017 1:29 am    Post subject: oops Reply with quote

oops[b][/b]

Last edited by bewolff on Fri Mar 10, 2017 1:53 am; edited 5 times in total
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bewolff



Joined: 07 Jan 2007

PostPosted: Fri Mar 10, 2017 1:40 am    Post subject: Reply with quote

FILING TAXES
If you are overseas you typically will file f1040 (regular tax form) and f2555-EZ (foreign income tax exemption). f2555 is if you own a home, I think. f2555ex is quite simple. If you use f2555 or f2555ez you have to use f1040 (rather than the 'ez' form).

1. f1040 https://www.irs.gov/pub/irs-pdf/f1040.pdf
2. f2555ez https://www.irs.gov/pub/irs-pdf/f2555ez.pdf
3. Previous Year Form 1040s https://apps.irs.gov/app/picklist/list/priorFormPublication.html?resultsPerPage=200&sortColumn=sortOrder&indexOfFirstRow=0&criteria=formNumber&value=1040&isDescending=false[/url]
4. Previous Year form 2555ez https://apps.irs.gov/app/picklist/list/priorFormPublication.html;jsessionid=nrxrJ27uTavef0rIp6z6yQ__?value=2555ez&criteria=formNumber&submitSearch=Find
You can also search and find these forms in editable PDF files.

When filling it out..a couple of things I ran into
You list your income in LINE 7 like normal, and the exempt income number put IN PARENTHESIS on LINE 21 with the note 2555ez. (This number is taken from 2555ez LINE 18 ).
The income and income exempt numbers should be the same unless you had some sort of capital gains or come other income. Then LINE 22 will show "0" income, which carries down to the end of the form.

So long as you made less than $101,300 in 2016, you should be exempt of any income.

Have a foreign spouse (non US citizen)? File as head of household, mark her has dependent, and put NRA (non-resident alien) in the box for her SSN.

Both the 1040and the 2555ez get mailed in together.
You send them to:
    Department of the Treasury
    Internal Revenue Service Center
    Austin, TX 73301-0215 USA


NOTE: You cannot claim EITC for yourself or a child if you file 2555 or 2555ez. You have to go the complicated listing deductions route.
NOTE: The IRS help line said if you have not filed in several years, you can mail in previous years and they will be received. It would help if you don't owe anything, of course.

BANK ACCOUNT REGISTRATION WITH IRS
You can also register your bank account online, pretty simply, which is a requirement of the US government's over reaching.
http://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html

You can file this year and previous years as well, on the site.

SOCIAL SECURITY TAXES
Korea has a "totalization agreement" with the US regarding SS payments. The idea is that you should not have to pay twice. If you were here for the entire year you can be exempt for SS and Medicare payments, so long as you paid into the system here. You may need to prove it, however. There is a form you can get from your employer. It will ultimately affect your retirement benefit in the States if you might one day get them. Information about that is on this site.
https://www.irs.gov/individuals/international-taxpayers/totalization-agreements
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PRagic



Joined: 24 Feb 2006

PostPosted: Sat Mar 11, 2017 9:43 pm    Post subject: Reply with quote

For Americans, you need to file a 2555 or 2555EZ (most can use this). This then is submitted ALONG WITH your 1040 (or 1040EZ). In the end you won't pay taxes on your income earned in Korea IF you satisfy the expat requirement for foreign earned income exculsion.

Most do, but be careful if you'd earned some income in the US prior to moving here and then, say, only worked a few months here before the tax year culminated. In THAT case, you might owe on your US income AND your Korean income. Just follow the directions. Pretty straight forward. If you've been here a full year, no problem and no taxes (well, up to around USD $100K give or take).

You also need to electronically file an FBAR documenting ALL international bank and investment account holdings IF the TOTAL of ALL accounts has hit 10K over the course of the year at any time. You don't pay any taxes here, but you do need to file.

Then you'll need to file the F8938, basically the same account info on the FBAR, with the IRS. This IS sent in with your taxes. IF you have interest, dividend, or cap. gains earned, this is reported on the 2555 (and carried over onto the 1040).

For the poster asking about back filing: You can send in multiple years to back file. For most teachers who have been here a few years, this is painless and just amounts to re-establishing your paper trail. No taxes or fines as you'd never been on the hook to pay anything to begin with (given your foreign earned income exclusion). Just make sure you download the correct forms for the correct years.

It's a good idea to get up to date. You never know. You might fall in love, get married, and want to get your new hubby or wife a green card or to apply for citizenship. To do that, you need a history of tax filings going back a few years. Want to eventually buy a house? Banks will want to see your paperwork if you want a loan.
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