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Quack Addict
Joined: 31 Mar 2008
Location: Seoul
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 Posted: Sun Jun 13, 2010 8:07 pm Post subject: Paying Korean taxes and American taxes...why? |
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| My recruiter wants me to send in a form to let the U.S. government that I will be recieving a paycheck overseas. This will then allow the U.S. government to tax me. The Korean government already taxes me. So why should I get taxed TWICE on one paycheck? Has anybody else just skipped out on paying taxes in your home country? |
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blade
Joined: 30 Jun 2007
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| Posted: Sun Jun 13, 2010 8:18 pm Post subject: Re: Paying Korean taxes and American taxes...why? |
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| Quack Addict wrote: |
| My recruiter wants me to send in a form to let the U.S. government that I will be recieving a paycheck overseas. This will then allow the U.S. government to tax me. The Korean government already taxes me. So why should I get taxed TWICE on one paycheck? Has anybody else just skipped out on paying taxes in your home country? |
Unless you earn over I believe $100,000 dollars uncle Sam won't tax you on your Korean income. |
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Jessie41
Joined: 14 Dec 2007
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| Posted: Sun Jun 13, 2010 8:23 pm Post subject: |
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I have never heard of having U.S. taxes deducted from your Korean paycheck. Are you sure you didn't misunderstand? Are you applying to public school? If so, you could be exempt from paying Korean taxes for two years. Perhaps the recruiter is suggesting you get a residency certificate from the IRS to submit to your school to avoid paying Korean taxes.
On the other hand, if you work overseas you can exclude a certain amount of your foreign earned income, which means you may not owe any U.S. taxes. I believe it is somewhere around $90,000 a year that you can exclude, but there are certain requirements you have to meet. I won't go into the details here, you should check the IRS website to see if you meet the requirements. But to answer your original question, I have not had to pay U.S. taxes on my income in Korea. |
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fugitive chicken
Joined: 20 Apr 2010
Location: Bucheon
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BringTheRain
Joined: 26 Apr 2010
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| Posted: Sun Jun 13, 2010 8:30 pm Post subject: |
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| yea keep on googling, you shouldn't have to pay any taxes back in the US unless you're loaded... |
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DeMayonnaise
Joined: 02 Nov 2008
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| Posted: Sun Jun 13, 2010 8:35 pm Post subject: Re: Paying Korean taxes and American taxes...why? |
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| Quack Addict wrote: |
| My recruiter wants me to send in a form to let the U.S. government that I will be recieving a paycheck overseas. This will then allow the U.S. government to tax me. The Korean government already taxes me. So why should I get taxed TWICE on one paycheck? Has anybody else just skipped out on paying taxes in your home country? |
I don't owe anything, so didn't bother filling out the form and sending it in. Have done that for 2 years now. Meh, we'll cross the bridge when I get there if Unkie Sam wants to make a big deal of it. I don't plan on making any money anytime soon in the US, so I'm not too worried about it. |
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DaeSung
Joined: 05 Dec 2005
Location: ����
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| Posted: Sun Jun 13, 2010 9:13 pm Post subject: |
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| Quote: |
| I don't owe anything, so didn't bother filling out the form and sending it in. Have done that for 2 years now. Meh, we'll cross the bridge when I get there if Unkie Sam wants to make a big deal of it. I don't plan on making any money anytime soon in the US, so I'm not too worried about it. |
Although you don't owe anything you are still required to file. You must file your taxes (indicating that you don't owe anything). It is easy and you can get turbo tax or whatever software program you want for like 20 bucks and just file. If you don't file your taxes and you happen to want to marry a Korean and come back to the states you'll be happy to know that you need tax records for the past 2 to 3 years indicating that you filed taxes. Even if you didn't make any money you will have to prove it or the embassy will more than likely tell you to file your back taxes and come back later.
So, the moral of the story, No you don't have to pay taxes, yes you do have to file taxes. File your taxes so that if for some random reason you want to marry a Korean you'll be able to get a visa for them to come back to the states with you. If you are like most English teachers you can probably just copy the same thing from year to year making minor changes to your wages. |
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air76
Joined: 13 Nov 2007
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| Posted: Mon Jun 14, 2010 2:25 pm Post subject: |
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| DaeSung wrote: |
| So, the moral of the story, No you don't have to pay taxes, yes you do have to file taxes. File your taxes so that if for some random reason you want to marry a Korean you'll be able to get a visa for them to come back to the states with you. If you are like most English teachers you can probably just copy the same thing from year to year making minor changes to your wages. |
There are a lot more reasons why you should file than the outside chance that you might marry a Korean...but yes, 100% you should be filing your tax return in your home country. If for nothing else, if you stay here for 3-4 years and send home $100,000 over that time period, you're going to want to have a way to prove that this cash was already taxed if you go back home and then they question where your hundred grand came from after 4 years of being off the grid.
The bottom line is that it takes 10 minutes to do, is free, and you won't have to pay anything....all of the information you need can be found at www.irs.gov |
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Quack Addict
Joined: 31 Mar 2008
Location: Seoul
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| Posted: Mon Jun 14, 2010 5:56 pm Post subject: |
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| fugitive chicken wrote: |
http://www.irs.gov/businesses/small/international/article/0,,id=97324,00.html
huh, I thought I read a thing recently saying we don't have to get taxed...didn't know this! |
This is what I read off this link:
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| Your worldwide income is subject to U.S. income tax, regardless of where you reside. |
My recruiter said the form I fill out, 8802, allows me to be tax free in Korea for 2 years but does not exclude me from U.S. taxes. Unless however, I never file back home and hide my money in a sock. |
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carleverson
Joined: 04 Dec 2009
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| Posted: Mon Jun 14, 2010 6:02 pm Post subject: |
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| Quack Addict wrote: |
| fugitive chicken wrote: |
http://www.irs.gov/businesses/small/international/article/0,,id=97324,00.html
huh, I thought I read a thing recently saying we don't have to get taxed...didn't know this! |
This is what I read off this link:
| Quote: |
| Your worldwide income is subject to U.S. income tax, regardless of where you reside. |
My recruiter said the form I fill out, 8802, allows me to be tax free in Korea for 2 years but does not exclude me from U.S. taxes. Unless however, I never file back home and hide my money in a sock. |
WRONG. |
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dharma bum
Joined: 15 Jun 2004
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| Posted: Mon Jun 14, 2010 6:22 pm Post subject: |
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From my understanding, you can be exempt from Korean taxes here if you file the form you are discussing, but then you have to pay U.S. taxes, which are much higher, without the foreign exemption - so your recruiter is right about it being possible but wrong about it being advisable.
If you do not fill out that form, you will simply have to pay the lower Korean income taxes, but you will be exempt from paying U.S. taxes assuming you're not making more than $86,000 or whatever the current figure is. As others have mentioned, you will still have to file U.S. returns (probably 1040 and 2555-EZ) as a person residing overseas, but you won't be paying anything to the U.S.
It's not mandatory to fill out the form your recruiter wants you to. Instead, it is just a way for you to apply to be considered under a different category of foreign resident subject to different tax laws, and it would most likely be detrimental to you. |
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definitely maybe
Joined: 16 Feb 2008
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| Posted: Mon Jun 14, 2010 8:12 pm Post subject: |
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I had to sort out 5 years of unfiled taxes after I got married a few years ago. It was a huge headache, but you won't be penalized on back taxes if you don't own anything, you meet the expat requirements, and don't earn over what is now $91,000 some odd dollars a year. If you have stocks, funds, trusts, or anything else back home, there is quite a bit more paperwork involved. I know it's annoying to have to think about and file taxes here, but isn't it at home as well? Just do it!
p.s. With the automatic extension for expats, taxes need to be mailed out today. |
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Quack Addict
Joined: 31 Mar 2008
Location: Seoul
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| Posted: Mon Jun 14, 2010 8:50 pm Post subject: |
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| dharma bum wrote: |
From my understanding, you can be exempt from Korean taxes here if you file the form you are discussing, but then you have to pay U.S. taxes, which are much higher, without the foreign exemption - so your recruiter is right about it being possible but wrong about it being advisable.
If you do not fill out that form, you will simply have to pay the lower Korean income taxes, but you will be exempt from paying U.S. taxes assuming you're not making more than $86,000 or whatever the current figure is. As others have mentioned, you will still have to file U.S. returns (probably 1040 and 2555-EZ) as a person residing overseas, but you won't be paying anything to the U.S.
It's not mandatory to fill out the form your recruiter wants you to. Instead, it is just a way for you to apply to be considered under a different category of foreign resident subject to different tax laws, and it would most likely be detrimental to you. |
Thank you. This is exactly what I wanted to hear. Cheers! |
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ThingsComeAround
Joined: 07 Nov 2008
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| Posted: Mon Jun 14, 2010 9:52 pm Post subject: |
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I'm curious:
When is the deadline for filing taxes overseas? Has it passed?
How much should it cost if you are filing it in Korea? |
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dharma bum
Joined: 15 Jun 2004
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| Posted: Mon Jun 14, 2010 9:53 pm Post subject: |
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| Glad it was helpful. To be completely honest, there might be a loophole that would allow you to get out of both U.S. and Korean taxes by filing the form you mentioned as well as the 1040 and 2555-EZ form; I'm just not entirely sure if it exists or how it might work. |
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