Korean Job Discussion Forums

[Toolman]

I'm coming to Korea in Dec. to teach in a Public School. Will this income be reported to the IRS in the U.S.A.? Thanks

[huffdaddy]

[dulouz]

HD Olde Boy,

The income isn't reported. The SK gov't doesn't send info to the IRS. You have to do that. There is no income tax likely but Soc Sec will want about $1500.

[huffdaddy]

[CBP]

I'm in the same boat. I thought there was a two-year rule that states during the first two years of absence from the U.S., we are required to pay taxes. After that point we have a new status that releases us from having to pay U.S. taxes. But you're saying we probably won't be required to pay? Only Social Security? The IRS website isn't clear. My state tax office insists that I have to pay taxes on my Korean income.

Any links, personal experiences, back doors you'd like to share?

Thanks!

[ChopChaeJoe]

State income tax laws are different than federal.

Once you've been out of the U.S. for 12 months (maybe it's 11 mos) you only have to pay after $80,000. If you're filing with less than 11-12 months, then you have to report and pay taxes on earned income. And I wouldn't mess with the IRS.

[CBP]

(Noticed the links only after I wrote my post. Sorry.)

It sounds like it'd be a good idea to estimate ahead of time how much taxes will be for the first year (federal and state), and then set up a separate savings account. My bank in the States will do an auto-transfer each month into my savings. Maybe Korea has the same thing? Anyway, I think it's a good idea to make "payments" into a separate account each month so I'm not overwhelmed when it comes time to pay taxes.

[Toolman]

My opinion is when I work and live in SK, I don't feel obligated to pay the USA anything,,,I'm receiving no services from the US, so why send them money.

So, will SK report my income to the IRS? If not, what they don't know want hurt them.

[CBP]

Earlier I asked about back doors with regards to this tax stuff. My thoughts were, I intend to pay, but can I get around paying the full thing? Now I'm thinking otherwise. I'll do my research and make sure that I don't overpay one penny, but I'm going to do this on the up and up.

Why? Because when you die you can't take your money with you. Because my friends in El Salvador, Hungary, Ukraine and several other countries envy me my U.S. passport. Because taxes SUCK but some of that money actually falls into the right hands. Because it's the law.

A language school accused me of being yet another greedy American who feels "entitled" to this, that and the other. I replied, "I feel entitled to what I'm entitled to. Period." Who wouldn't want health benefits and a pension plan? Who wouldn't try to increase their annual leave from one week to two? It's sad that the first time I've had health insurance in years will be because I'm moving overseas. But it's Korean law, and so I won't settle for less.

But the sort of entitlement you're talking about is a different sort of greed. It's selfish, arrogant and immature. And one day it could get you in a lot of trouble, especially if you're young and plan on moving back to the States some day. More people get audited than you realize.

I have American friends who don't pay taxes. They hide money, manipulate money, and get nervous when anyone mentions the IRS. It's not worth it. Take pride in taking control of your life and knowing where you stand. I didn't vote for Bush, but that doesn't mean I don't appreciate what it means to honor authority and live a clean life.

[ella]

So the answer is, "It should be reported by you. It is not reported by any entity in Korea." Is that correct?

[ella]

Double post deleted.

[CBP]

From what I'm reading South Korea has absolutely no obligation to report our income to the IRS. I've heard that lots of teachers overseas don't pay their taxes. So it's your choice.

For someone who's thinking of not paying taxes to the IRS (Ella, I'm not at all implying that this is you), don't think short term. Think about what this could mean for you when you're back home and applying for a loan, trying to buy a house, suddenly start paying taxes again after a lengthy absence.

[huffdaddy]

[ttompatz]

[CBP]

Does that mean they deduct taxes but keep it for themselves?

(Is there a correct spelling for hakwon/hogwon/hagwan?)