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lookingtoteach
Joined: 18 Feb 2003
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 Posted: Sat Jan 29, 2005 9:48 am Post subject: questions for Canadians re:taxes |
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| I am a Canadian (obviously if you look at this thread's subject) who is approaching tax season with caution. I worked for four months in Korea last year and did a runner. What happens now with my taxes? Do I claim them? Will they somehow know that I was working in Korea? I don't have my paystubs from then so how do I prove how much I made? If I don't claim the income what happens now? Anyone who has experienced this please reply. I don't want to wait until the last minute to figure this out. Thanks |
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Rather_Dashing
Joined: 07 Sep 2004
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| Posted: Sat Jan 29, 2005 5:40 pm Post subject: |
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| If you do not claim them, you are liable for tax evasion and can go to jail for a long time. Talk to an accountant. |
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chronicpride
Joined: 16 Jan 2003
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mindmetoo
Joined: 02 Feb 2004
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| Posted: Sat Jan 29, 2005 5:55 pm Post subject: |
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| Rather_Dashing wrote: |
| If you do not claim them, you are liable for tax evasion and can go to jail for a long time. Talk to an accountant. |
No. You have to avoid a lot of taxes in a very bad way to go to jail. Typically they will tack on a hefty interest penalty.
How much of 2004 did you live in Korea? How much in 2004 did you earn in Canada? What ties do you have in Canada? The deemed resident rule is so murky it's really hard to tell what Rev Can considers a deemed resident. My rule of thumb is if you own no property in Canada and have no wife/child and you're going to be here for over a year, and you didn't use your health card during the tax year, then don't report your Korean income. Let them figure it out if they really think you're a deemed resident.
Rev Can is not God. They don't have access to your Korean "T4s". They don't have computers looking into your bank account at tax time. To Rev Can, you are your T-slips. People drop off the tax radar all the time (save money and bum around for a year, shack up with a GF/BF).
If you can move your money home in blocks less than 10K, don't worry about it.
The major red flag Rev Can uses to trigger an audit is sudden changes in income. You earn 80K for 10 years and then you earn 20K of taxable income with a bunch of deductions. Hrm. If you've gone from making $12K a year working part time while in university to making $0K in T-slip income, that won't likely raise a red flag. There are far bigger fish to fry.
I moved to Seattle in Jan 2000. I paid my taxes for my income in 1999. I haven't paid a penny of Canadian tax since, living in Seattle and Seoul. Rev Can, despite being aware of my new addresss and seeing my Canadian T4 income go from $60+K in 1999 to $0K in 2000 and onward, they've never so much as sent me a single piece of mail asking me to file. |
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lookingtoteach
Joined: 18 Feb 2003
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| Posted: Sat Jan 29, 2005 6:42 pm Post subject: |
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| I worked in Korea for four months last year, January to April. I withdrew all of the money from my Korean account in cash before I left, so I don't have any ties to Korea at all. All of the info given on this thread so far, or at least all of the ones I've seen, have been about Canadians in Korea at tax time. I'm back in Canada and plan to have my taxes filed, but don't know if I have to claim my Korean income. They wouldn't know any way to know that I just didn't spend four months unemployed would they? Is there any way for them to know that I was working abroad? |
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chronicpride
Joined: 16 Jan 2003
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| Posted: Sat Jan 29, 2005 7:16 pm Post subject: |
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| Consider yourself lumped into the massive amount of Canadians who went travelling for a couple of months last year. If you were to get audited, it won't be stemming from this. It'll be random, or for something that might be in your past that could be a big red flag to them. FWIW, I remember a guy here who declared, paid his taxes, and then was audited after the fact. |
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Sage Monkey
Joined: 01 Nov 2004
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| Posted: Sat Jan 29, 2005 9:29 pm Post subject: |
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Last edited by Sage Monkey on Wed Feb 01, 2006 9:48 am; edited 1 time in total |
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mindmetoo
Joined: 02 Feb 2004
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| Posted: Sun Jan 30, 2005 12:41 am Post subject: |
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| Sage Monkey wrote: |
| lookingtoteach wrote: |
| I worked in Korea for four months last year, January to April. I withdrew all of the money from my Korean account in cash before I left, so I don't have any ties to Korea at all. All of the info given on this thread so far, or at least all of the ones I've seen, have been about Canadians in Korea at tax time. I'm back in Canada and plan to have my taxes filed, but don't know if I have to claim my Korean income. They wouldn't know any way to know that I just didn't spend four months unemployed would they? Is there any way for them to know that I was working abroad? |
There is a tax treaty between Canada and Korea... you better file bud! |
All what tax treaties say is both countries agree to eliminate double income taxation, allowing citizens paying income tax in one country to claim credits towards the tax he might have to pay in his nation of citizenship. It does not mean the countries transmit your salary information between tax agencies. |
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Rather_Dashing
Joined: 07 Sep 2004
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| Posted: Sun Jan 30, 2005 1:40 am Post subject: |
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| mindmetoo wrote: |
| All what tax treaties say is both countries agree to eliminate double income taxation, allowing citizens paying income tax in one country to claim credits towards the tax he might have to pay in his nation of citizenship. It does not mean the countries transmit your salary information between tax agencies. |
Not necessarily! Plenty of people in the past would, for example, earn income in one country and say they've paid taxes in another, and tell the other country that they paid taxes in the original country, the net result being the scammer pays no taxes. These treaties have eliminated that loophole. Yes, they can easily have access to your income records from other countries with which they have a treaty with at their request. This isn't the 1960s anymore. However, they would have to audit you in order to do that. If you get audited and you didn't claim your Korean income, you are screwed. |
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chronicpride
Joined: 16 Jan 2003
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| Posted: Sun Jan 30, 2005 3:55 am Post subject: |
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Revenue Canada auditors giving you a certain amount of time to produce your Korean paystubs or you face a fine, is not what I would personally call being screwed. Or at least not at the level of losing a lot of sleep over, anyway.
To the OP, if you're concerned, then save your paystubs, don't file your Korean income, and in the slim chance of an audit, plead ignorance, and provide them with your Korean paystubs before the due date that the auditors give you. |
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Rather_Dashing
Joined: 07 Sep 2004
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| Posted: Sun Jan 30, 2005 11:02 am Post subject: |
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| chronicpride wrote: |
To the OP, if you're concerned, then save your paystubs, don't file your Korean income, and in the slim chance of an audit, plead ignorance, and provide them with your Korean paystubs before the due date that the auditors give you. |
In other words, cheat on your taxes. If confronted about it, lie to the tax man. To the OP: if you didn't want to pay Canadian taxes, you should have stayed in Korea long enough so that you wouldn't be liable to. |
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lookingtoteach
Joined: 18 Feb 2003
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| Posted: Sun Jan 30, 2005 4:14 pm Post subject: |
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| It's not that I don't want to pay taxes on it, I just don't know if I have to, or how to. I can't prove how much I made because I don't have my paystubs from them. Plus, I don't know why I should claim the income considering the deductions were taken off in Korea and I didn't get anything back when I left (mainly because I ran). Someone told me that I should put it in the same place that waiters/waitresses claim their tips. But it wasn't additional to my regular salary so I don't think that it's the same thing. |
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Rather_Dashing
Joined: 07 Sep 2004
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| Posted: Sun Jan 30, 2005 4:47 pm Post subject: |
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| In that case, talk to an accountant. Get your taxes done at H&R Block or something. It may cost a bit more, but they maximize your return and you won't get into any legal hassles. |
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chronicpride
Joined: 16 Jan 2003
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| Posted: Sun Jan 30, 2005 6:54 pm Post subject: |
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| Rather_Dashing wrote: |
| chronicpride wrote: |
To the OP, if you're concerned, then save your paystubs, don't file your Korean income, and in the slim chance of an audit, plead ignorance, and provide them with your Korean paystubs before the due date that the auditors give you. |
In other words, cheat on your taxes. If confronted about it, lie to the tax man. To the OP: if you didn't want to pay Canadian taxes, you should have stayed in Korea long enough so that you wouldn't be liable to. |
How long is that period, by the way? |
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chronicpride
Joined: 16 Jan 2003
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| Posted: Sun Jan 30, 2005 7:10 pm Post subject: |
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| lookingtoteach wrote: |
| It's not that I don't want to pay taxes on it, I just don't know if I have to, or how to. I can't prove how much I made because I don't have my paystubs from them. |
You can get your tax receipts from Korean Tax Services at the tax office in the district that your hagwon resides in. I'm assuming that you are back in Canada and may find it difficult to get to that office over here, so be mindful that if you file without those receipts, you increase the chance of audit. The auditors will give you a time limit to produce those receipts, otherwise you will be subject to a fine, which I've seen in the neighborhood of $1200CAD. |
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