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hagwonnewbie
Joined: 09 Feb 2007
Location: Asia
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 Posted: Sat Aug 04, 2007 5:42 pm Post subject: Americans pay no taxes |
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| I was trying to remember the rule for Americans paying taxes back home. Don't you have to work 11 out of 12 months overseas or something like that to avoid paying them. The link to it on the FAQ page doesn't work anymore. Can someone give me a different link or the info? |
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KimchiExplosion
Joined: 01 Jul 2007
Location: Nowhere near Seoul
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saw6436
Joined: 16 Jan 2003
Location: Daejeon, ROK
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| Posted: Sat Aug 04, 2007 8:31 pm Post subject: |
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| Just remember that even if you don't have to pay your USA taxes you must still file every year. |
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Woland
Joined: 10 May 2006
Location: Seoul
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| Posted: Sat Aug 04, 2007 9:19 pm Post subject: |
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| KimchiExplosion wrote: |
http://wiki.galbijim.com/Know_your_expatriate_taxation
This site rules. |
It's not quite accurate about the US.
First, you do have to file every year, regardless of whether you will owe money or not. Living abroad gives you an automatic two month extension for filing, until June 15th. You can request an additional two month extension to August 15th.
Second, the deduction is now over $80,000 ($82,000 or $85,000 - I can't remember; I have an accountant do this). There are two ways to receive this deduction. I have only used one of them (for the last ten years) and will only talk about it here - the physical presence test.
Basically, you need to show that, in any 365 day period that includes some portion of the year in which you are filing a tax return for, you were physically present in the US for no more than 35 of those days. Thus, for my 2006 taxes, my accountant filed that I was in the US for exactly 35 days in the period from April 4, 2005 to April 3, 2006. The deduction is proportional to the number of days you were out of the country. Let's call 35 days 10% of 365 for purposes of this discussion; thus, I received 90% of the total deduction available. This allowed me to pay no American taxes on my income once again. In fact, I'm getting a $30 return because of the rebate to all taxpayers of the federal telecommunications tax.
A few notes. I'm no tax expert; see one before taking this advice. Any portion of any day spent in the US counts as a day. If you are leaving late on March 28th and your plane is delayed until after midnight, that's an extra day. (I doubt they go looking for this, but it must have come up because it gets mentioned.) Transiting through the US to someplace else counts as a day. I'm not sure, but presence in certain US overseas territories counts as presence for tax purposes. Again, check with someone who really is expert on this.
If your physical presence will not be enough to avoid a bite, do get good payroll records from your employer. The way my pay is arranged, only part of it is in the form of salary/wages, which are taxable. The remainder comes in a strange form that I don't understand, but which my accountant says is non-taxable in the US. If I had to pay, my declared income would be reduced because of this and my taxes lower. Taxes you pay here are deductible if you have a tax obligation in the US, as well.
The best advice I can give you is get a good accountant or tax specialist. I pay mine $175 each year for this work, well worth it in what it has saved me in hassle. |
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hagwonnewbie
Joined: 09 Feb 2007
Location: Asia
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| Posted: Sat Aug 11, 2007 8:06 pm Post subject: |
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You stated:
Basically, you need to show that, in any 365 day period that includes some portion of the year in which you are filing a tax return for, you were physically present in the US for no more than 35 of those days. Thus, for my 2006 taxes, my accountant filed that I was in the US for exactly 35 days in the period from April 4, 2005 to April 3, 2006. The deduction is proportional to the number of days you were out of the country.
So if I am out of the country from March 1, 2007 to February 01, 2008; I should only have to pay 10/12ths of my 2007 taxes, right?
This sounds simple, but I suspect that I will need to get an accountant to do my taxes also.
Thanks for the tips, y'all. |
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dogshed
Joined: 28 Apr 2006
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| Posted: Sat Aug 11, 2007 8:47 pm Post subject: |
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| hagwonnewbie wrote: |
You stated:
Basically, you need to show that, in any 365 day period that includes some portion of the year in which you are filing a tax return for, you were physically present in the US for no more than 35 of those days. Thus, for my 2006 taxes, my accountant filed that I was in the US for exactly 35 days in the period from April 4, 2005 to April 3, 2006. The deduction is proportional to the number of days you were out of the country.
So if I am out of the country from March 1, 2007 to February 01, 2008; I should only have to pay 10/12ths of my 2007 taxes, right?
This sounds simple, but I suspect that I will need to get an accountant to do my taxes also.
Thanks for the tips, y'all. |
Here's the post I made. http://forums.eslcafe.com/korea/viewtopic.php?t=87567&highlight=tax
One minor thing. It's a calendar year as defined by the IRS and may not be exactly 365 days. |
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Vince
Joined: 05 May 2003
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| Posted: Sat Aug 11, 2007 9:16 pm Post subject: |
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| I did my own taxes and submitted the overseas exemption form. The instructions say the form needs to be submitted only the first year, and it will automatically extend to the following years that you're still overseas. I didn't trust that and each subsequent year included a copy of the first year's form as a reminder. |
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Apple
Joined: 29 May 2007
Location: S. Korea
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| Posted: Sat Aug 11, 2007 10:20 pm Post subject: |
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| saw6436 wrote: |
| Just remember that even if you don't have to pay your USA taxes you must still file every year. |
Oh else what? I know guys who havent filed in 20 years.. |
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flakfizer
Joined: 12 Nov 2004
Location: scaling the Cliffs of Insanity with a frayed rope.
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| Posted: Sun Aug 12, 2007 1:57 am Post subject: |
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| Apple wrote: |
| saw6436 wrote: |
| Just remember that even if you don't have to pay your USA taxes you must still file every year. |
Oh else what? I know guys who havent filed in 20 years.. |
People in the States or living abroad? |
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Apple
Joined: 29 May 2007
Location: S. Korea
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