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Korean Job Discussion Forums
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MANDRL
Joined: 13 Oct 2006
Location: South Korea
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 Posted: Wed Feb 11, 2009 7:41 pm Post subject: |
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| Go to http://turbotax.intuit.com/. It will walk you through any circumstances you may have. |
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Viaje
Joined: 03 Feb 2009
Location: Indebted, USA
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| Posted: Tue Feb 24, 2009 2:50 pm Post subject: |
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I thought the first two years in a foreign country were the only ones where you are exempt from paying taxes to the US? Doesn't this mean you would owe taxes for all the other, subsequent years? And I thought this means there would be both penalties and interest on any money owed?
Sorry if I don't know the laws around all this, can anyone clarify? |
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mole
Joined: 06 Feb 2003
Location: Act III
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| Posted: Tue Feb 24, 2009 3:29 pm Post subject: |
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| Viaje wrote: |
I thought the first two years in a foreign country were the only ones where you are exempt from paying taxes to the US? Doesn't this mean you would owe taxes for all the other, subsequent years? And I thought this means there would be both penalties and interest on any money owed?
Sorry if I don't know the laws around all this, can anyone clarify? |
As far as I know and have assumed all along, you get Foreign Earned Income Exclusion (Form 2555-EZ) IF YOU:
Are a US citizen or resident alien.
Earned wages/salary outside US.
Had total foreign income of [was $70,000 or less, but that has increased over the years.]
Are filing a 12-month calendar year return.
AND YOU:
blah. Look it up. 
You have to have lived out of US for 330 days within said year. Sort of.
I've heard rumors of the two year thing, but like all other rumors on Planet K, not true.
I've also heard of penalties and interest for back taxes owed.
If you're teaching EFL in Korea, you are not owing any taxes. You don't make enough.
As noted, I've been up to 7 years behind in filing. No questions asked by anyone.
Your portion of the national debt, not including unfunded promises like social security and medicare, is about $150,000.
They screw us more covertly. Not gonna try and squeeze you on income tax. |
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Jati
Joined: 13 Dec 2008
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| Posted: Wed Feb 25, 2009 4:37 am Post subject: |
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| Viaje wrote: |
I thought the first two years in a foreign country were the only ones where you are exempt from paying taxes to the US? Doesn't this mean you would owe taxes for all the other, subsequent years? And I thought this means there would be both penalties and interest on any money owed?
Sorry if I don't know the laws around all this, can anyone clarify? |
Based upon my reading of the Form 2555 instructions, people with overseas earned income must file, but may not owe tax if the total income comes under the $87,000 exclusion limit. (Expats on expat packages are often over this amount since you must include housing allowance and other expat benefits.) I have filed for 13 years but have not paid any tax since my income is way below the exclusion limit. When I first started out, I used a US-based tax accountant. He would have known about the two-year limit if it existed.
If you go back and forth a lot, then you must divide your income by the ratio of time outside the US and inside the US. |
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nene
Joined: 11 Jun 2005
Location: Samcheok, Gangwon-do
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| Posted: Fri Mar 13, 2009 6:51 pm Post subject: |
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The two year exclusion is from paying Korean income taxes for those of us working in public schools.
Thanks for the good info posters. |
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