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unitedhotcakepreferred
Joined: 08 Aug 2011
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 Posted: Wed Jul 10, 2013 2:24 pm Post subject: US Income Tax on Foreign Income |
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| How do taxes work on money I make in South Korea? Is it taxed by the US government? Do I have to file anything? For 3 years now I've been earning money teaching in Korea but I haven't filed anything or paid any taxes to the US. Is there something I should've done or should be doing? |
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ttompatz
Joined: 05 Sep 2005
Location: Kwangju, South Korea
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| Posted: Wed Jul 10, 2013 2:28 pm Post subject: Re: US Income Tax on Foreign Income |
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| unitedhotcakepreferred wrote: |
| How do taxes work on money I make in South Korea? Is it taxed by the US government? Do I have to file anything? For 3 years now I've been earning money teaching in Korea but I haven't filed anything or paid any taxes to the US. Is there something I should've done or should be doing? |
You are legally bound (as a US citizen) to file your US tax return.
You pay taxes in Korea on your Korean income.
For your US taxes your Korean earned income falls under the "foreign earned income" tax exemption (about US$90k) per year (effectively making your earned income in Korea tax free in the US).
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unitedhotcakepreferred
Joined: 08 Aug 2011
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| Posted: Wed Jul 10, 2013 2:47 pm Post subject: |
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| Thanks for your reply. So, if you aren't making more than 90k, does that mean you don't have to file anything or report any income? Because I haven't been doing anything and I'm worried now that my neglect will catch up to me. |
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ttompatz
Joined: 05 Sep 2005
Location: Kwangju, South Korea
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| Posted: Wed Jul 10, 2013 4:01 pm Post subject: |
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| unitedhotcakepreferred wrote: |
| Thanks for your reply. So, if you aren't making more than 90k, does that mean you don't have to file anything or report any income? Because I haven't been doing anything and I'm worried now that my neglect will catch up to me. |
File, declare and take the exemption so you pay nothing.
US citizens are required by US law to file EVERY YEAR whether you are home or abroad.
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thegadfly
Joined: 01 Feb 2003
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| Posted: Wed Jul 10, 2013 4:29 pm Post subject: |
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unitedhotcake,
As ttom said, but be sure to keep your pay stubs from Korea -- bankbooks help, too, as well as the end-of-the-year tax form you may (should?) get from your employer showing what you paid, what was owed, and how much you still owe/how much you will be refunded.
I've gone through two IRS audits as a result of "suspicious" activity -- large cash deposits into my US account, and the purchase of a house in the US without any reported income in the US -- both times, I just had to show my Korean paperwork, and everything was fine. I even have to say that the IRS agents I dealt with were very nice, polite folks, and they did their best to make sure I did not feel intimidated or threatened, as the initial correspondence from the IRS was kinda scary....
File every year, and keep whatever Korean paystubs you get for at least 8 years after you leave (the IRS agents I worked with said that the IRS would only go back 8 years), and you should be golden in even the worst case. In the best case, you will never hear a peep from anyone.... |
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jjajangmyun
Joined: 31 Aug 2011
Location: way down south!
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| Posted: Thu Jul 11, 2013 2:20 am Post subject: |
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Fill out Form 1040.
Then fill out Form 2555 and attach it to your 1040.
You can download them on the IRS.GOV website. |
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