Korean Job Discussion Forums

[dogshed]

I posted this on another thread and thought it deserves it's own thread.

http://www.irs.gov/publications/p54/ch04.html#d0e4324

After reading through the examples it seems to me that you would have to do two contracts unless you start near the beginning or near the end of the year.

-Jeff


http://www.irs.gov/publications/p54/ch04.html#d0e2230

OK I was wrong. Please read the above link.

I called the IRS and talked to employee 810022.

She says you just have to meet one of the tests. Either the bonefied resident test, entire tax year, or the substantial presence test, 330 days in a 12 month period.

She pointed out that extensions are six months so depending on your start date you can use an extension to carry to until you meet the 330 day requirement or you can file and then file an ammended return once you meat the requirements.

There is some other stuff in the link above. In some situations you can get aaway with a shorter time period.

She also said for the 2006 tax year the exclusion will go up to 82,400 US dollars.

-Jeff
_________________
bowlad.com

[Yeolchae]

I don't trust employee 810022. She already gave me bad info.

[mogikilla]

This online tax booklet should explain it (in a long-winded IRS kind of way--11 pages):

http://www.irs.gov/pub/irs-pdf/p593.pdf
That's Publication 593 (Tax Highlights for U.S. Citizens and Residents Going Abroad) -- it was that catchy title that caught my eye ^.~

It also refers to Publication 54 (Tax Guide for U.S. Citizens and Resident Aliens Abroad), Publication 514 (Foreign Tax Credit for Individuals), and Publication 901 (U.S. Tax Treaties).

It says you must file (a 1040?) with a Form 2555 (or Form 2555EZ if your only claiming the exemption---like most American teachers & other non-gov types making less than $82,400/year would).

It also claims the embassy might have the tax forms you need, but if you have a printer, you could just print them out yourself, ya?

It's all at www.irs.gov (like the other posters said)

Not that I've ever filed this stuff, just that we're supposed to.

[Fresh Prince]

[lastat06513]

To be exempted from paying income tax; you have to either...

1. Be a bonafide resident of the country where you are working (which most of you are since you need an E2 visa to work legally)

People who are not qualified are;
- Military
- Embassy workers/ officials
- US government workers/ contractors overseas
- Anyone working in such a capacity that enables them to get a W2 form
- The case of Korea, most people who have an A-2/3 visa (Sofa/Diplomatic visa)

2. Be able to prove that you worked (or lived) overseas for 1 calendar year

3. Be away from the US for 12 consecutive months prior to the next Tax Year.

4. Be gone for more than 6 months out of the current tax year (either at the beginning or end of the year as long as you are not working for the other 6 months [or at least working "under the table"]

5. You were working overseas for at least 6 months and have an income statement that shows you paid tax in the host country.


Then you have an additional 4 months from the original tax deadline to submit your Tax form- 1040 (can't use 1040EZ) AND Tax form 2555. And then if you are staying overseas longer than a year, you have a 3-year grace period to file (which means you have to file your 2004 Tax forms this year and you have until 2009 to file your 2006 tax forms.)

[hari seldon]

It might bother you to learn that one-third of the tax questions posed to IRS telephone representatives are answered incorrectly.
http://www.treas.gov/tigta/auditreports/2005reports/200540146fr.pdf

[lastat06513]

Thats why a person who helped out with my taxes since 1992, had a "fun time" looking up all the rules and regulations before helping me file my 2001-2002 tax forms for my exemptions.

A long while ago, there were people who would go to the USO at Camp Kim to help people file their tax forms for a nominal fee compared to what the person at H&R Block would charge....then again, that is also old info.

[dogshed]

[dogshed]

[hogwonguy1979]

most of us can use # 1 in lastats post.

the first year here can be a bit of a trick, use the extensions instead filing a 1040x, those tend to throw up flags with the IRS and may cause you to be audited at some point

[dogshed]

[dogshed]

I just did a little reviewing on the IRS site.

For income you can't put under the Foreign Earned Income Exclusion there is also a foreign tax credit, a foreign tax deduction, and a foreign housing exclusion. -Jeff

[dogshed]

It seems there are some more details. This thread should cover everything:

http://forums.eslcafe.com/korea/viewtopic.php?t=87567&highlight=tax+exclusion