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GreenFloyd
Joined: 03 May 2010
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Posted: Wed Mar 21, 2012 10:23 pm Post subject: 2nd year in Korea tax: Once 2555 is filed once, then what?? |
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The instructions for form 2555 to exclude foreign income say that once it's claimed, it remains in effect for all future years until revoked.
What have you U.S. Citizens done on your second or third years in Korea to pay taxes? Last year I claimed the exclusion, and I was about to file the 2555 again, but I'm confused if I have to.
Do I even need to fill out a 1040? If so, how will they notice on the form that I am claiming exclusion if there is no additional paperwork?
This stuff is driving me bonkers  |
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pkang0202

Joined: 09 Mar 2007
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Posted: Thu Mar 22, 2012 12:13 am Post subject: |
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good question, I would also like to know |
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cedarseoul
Joined: 16 Feb 2008 Location: nowon-gu
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Posted: Thu Mar 22, 2012 5:08 am Post subject: |
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You still have to file 1040 and 2555 every year. The point of the revocation clause is to prevent people from switching back and forth between 2555 and the foreign tax deduction--as it suits them. If we were working in a country with a HIGHER federal tax than is imposed in the States, it would be more advantageous to skip 2555 and file the deduction instead...since there is no income cap. As it is, given Korea's relatively lower progressive tax, 2555 is our friend.
A word to the wise: don't EVER revoke the 2555 exclusion unless you are SURE you will never need it again. My understanding is that once you revoke, it's very difficult to reinstate for 5 years. |
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GreenFloyd
Joined: 03 May 2010
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Posted: Thu Mar 22, 2012 3:38 pm Post subject: |
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Thank you!
One more question, if you or anybody else knows. I came to Korea in August of 2010, so last year in 2011 when I was getting ready to file taxes, I extended my due date 6 months in order to qualify for bona-fide residence in order to not pay taxes.
A friend of mine told me I need to do that again this year, but it doesn't seem to make sense to me considering I was present in Korea all of 2011. Do I need to extend my taxes by 6 months again? |
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cedarseoul
Joined: 16 Feb 2008 Location: nowon-gu
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Posted: Thu Mar 22, 2012 4:33 pm Post subject: |
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No. If you were in Korea (or anywhere else overseas) for all of 2011, you more than meet the physical presence test--and you can file right now if you want to. You automatically qualify for a two month extension, though (you don't have to do anything for that), so if you want to wait a while longer, you can file legally as late as June 17 without any penalties.
(I'm assuming you won't have any tax burden in the States. If you do, you are technically required to pay up by April 17 even though you file later.) |
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