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Korean Job Discussion Forums
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DaHu
Joined: 09 Feb 2011
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 Posted: Fri May 13, 2011 8:40 am Post subject: |
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| Radius wrote: |
when you go through the steps answering just a couple yes or no questions, the last one asks if you made more than 9k for the year. Are they asking if you made more than 9k in America? Because we made $0 in America, and if we should answer that question as no, then we actually don't have to file (Federal) taxes
http://www.irs.gov/individuals/article/0,,id=96623,00.html |
My best advice to anyone asking about taxes - NEVER ever listen to anyone saying you don't have to file. File every year, even if you make $0, even if you don't have to pay. |
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sirius black
Joined: 04 Jun 2010
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| Posted: Fri May 13, 2011 3:26 pm Post subject: |
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Also, although you make less than 90k, if you owed taxes before you left, then I would think in theory they can ask the Korean bank you have your money in to garnish the amount from your local korean bank. At least in theory.
Even so, filing taxes (and you should) means the IRS knows you're in Korea working. If they have any issues they not only know where you are but conceivably can get access to your money if I read the article right. Maybe it doesn't say but knowing what I know about the IRS, I wouldn't put it past them. If they can get money out of the Swiss, Korea is a piece of cake.
As for Hong Kong, I wouldn't be so sure they can't get your money out of their as well. China does a huge amount of trade with the U.S. I'd think they wouldn't want to jeapordize that relationship. One, I assume the money involved is inconsequential compare to the amount of trade so why not give up a few Americans? Second, China may also want some reciprocity for their citizens or companies that do business in the U.S. so they would oblige.
I do agree with a previous poster who calls them the world's largest mafia. Furthermore, they can charge interest and fees that the government doesn't allow banks and companies to do...but its okay for them to do it. Hypocritical b@$tards. |
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Yaya
Joined: 25 Feb 2003
Location: Seoul
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| Posted: Sat May 14, 2011 7:54 am Post subject: |
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| I also believe being self-employed abroad is subject to U.S. taxes. |
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dogbert
Joined: 29 Jan 2003
Location: Killbox 90210
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| Posted: Sat May 14, 2011 11:56 am Post subject: |
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| U.S. persons owe taxes on their global income. |
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sirius black
Joined: 04 Jun 2010
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| Posted: Sat May 14, 2011 2:55 pm Post subject: |
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| dogbert wrote: |
| U.S. persons owe taxes on their global income. |
...or more specifically, you have to file taxes every year. If you are a US citizen or permanent resident, no matter where you live or make your money, you have to file. You may not owe but you must file. Even if you make nothing.
(as an aside, even if you make money illegally...crazy as it sounds. there is a space on the tax form for illegal income. technically, if you're a drug dealer, illegal gambler, extortionist, you must report it!). |
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Swampfox10mm
Joined: 24 Mar 2011
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| Posted: Sat May 14, 2011 3:20 pm Post subject: |
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I am continually amazed by the percentage of people teaching in Korea who are anti-tax to the point that they practically left their countries over it.
Same problem with paying back loans (although I've found this seems to be more of an issue with Canadians and student loans). Some of them have been well-known members of Dave's for years.
I have a coworker from the USA who says he doesn't believe requiring US citizens to pay tax is consitutional, refuses to ever pay or file, and hasn't for years. He also never plans on moving back. |
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northway
Joined: 05 Jul 2010
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| Posted: Sat May 14, 2011 3:53 pm Post subject: |
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| dogbert wrote: |
| U.S. persons owe taxes on their global income. |
...if they make more than $90,000 a year. |
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atwood
Joined: 26 Dec 2009
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| Posted: Sat May 14, 2011 8:21 pm Post subject: |
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| Swampfox10mm wrote: |
I am continually amazed by the percentage of people teaching in Korea who are anti-tax to the point that they practically left their countries over it.
Same problem with paying back loans (although I've found this seems to be more of an issue with Canadians and student loans). Some of them have been well-known members of Dave's for years.
I have a coworker from the USA who says he doesn't believe requiring US citizens to pay tax is consitutional, refuses to ever pay or file, and hasn't for years. He also never plans on moving back. |
Is he also a big Wesley Snipes fan? |
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dogbert
Joined: 29 Jan 2003
Location: Killbox 90210
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| Posted: Sun May 15, 2011 2:40 pm Post subject: |
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| northway wrote: |
| dogbert wrote: |
| U.S. persons owe taxes on their global income. |
...if they make more than $90,000 a year. |
Yes, there is that threshold, but as Sirius Black noted, you still have to file a return.
And I believe that $90,001st dollar is taxed as though you'd earned $90,000, not $1. |
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northway
Joined: 05 Jul 2010
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| Posted: Sun May 15, 2011 2:54 pm Post subject: |
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| dogbert wrote: |
| And I believe that $90,001st dollar is taxed as though you'd earned $90,000, not $1. |
I believe this is true, though I think you do get credit for taxes already paid. I.e. if you've already had 20% of your taxes taken out by the country you earn in, you don't owe anything on that 20%. Otherwise Americans living in Europe would be shelling out their entire salary to cover their taxes. |
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atwood
Joined: 26 Dec 2009
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| Posted: Sun May 15, 2011 3:09 pm Post subject: |
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| I'm surprised that no one has mentioned that, at least in some cases, the U.S. Embassy checks to see if you've been filing tax returns before issuing you a new passport. |
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MA_TESOL
Joined: 11 Nov 2007
Location: Seoul
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| Posted: Sun May 15, 2011 4:17 pm Post subject: |
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Forms Which Must be Filed With IRS to Avoid Severe Penalties
If you own more than a 5% ownership interest in a foreign (non-US) corporation you are required to file a special form with the IRS reporting that interest. In many cases, if that foreign corporation is making profits, it will be a �controlled foreign corporation� and you may also owe U.S. tax on its earnings. If you are the beneficiary or trustee of a foreign trust you must file a special form with the IRS. Another a form is required to be filed with the U.S. Treasury if you have ownership or signature authority over a foreign bank account which anytime during the year has a balance of more than $10,000 US or more. If you fail to file any of these forms as required by law, you will be subject to penalties up to $10,000 or more. These penalties might be assessed many years from now when the U.S. IRS and the Mexican Hacienda finally start sharing information on a regular basis. If you do not file these forms when required, it will be very difficult to later avoid those penalties. |
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atwood
Joined: 26 Dec 2009
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| Posted: Sun May 15, 2011 8:28 pm Post subject: |
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| MA_TESOL wrote: |
Forms Which Must be Filed With IRS to Avoid Severe Penalties
If you own more than a 5% ownership interest in a foreign (non-US) corporation you are required to file a special form with the IRS reporting that interest. In many cases, if that foreign corporation is making profits, it will be a �controlled foreign corporation� and you may also owe U.S. tax on its earnings. If you are the beneficiary or trustee of a foreign trust you must file a special form with the IRS. Another a form is required to be filed with the U.S. Treasury if you have ownership or signature authority over a foreign bank account which anytime during the year has a balance of more than $10,000 US or more. If you fail to file any of these forms as required by law, you will be subject to penalties up to $10,000 or more. These penalties might be assessed many years from now when the U.S. IRS and the Mexican Hacienda finally start sharing information on a regular basis. If you do not file these forms when required, it will be very difficult to later avoid those penalties. |
I know of someone currently negotiating with the IRS regarding penalties on unreported bank account holdings. He's had to hire a lawyer/accountant. Supposedly, with the penalties he owed in the neighborhood of $20,000. He had a lot of money in the bank.
I think most teachers have little to worry about. They're really after people hiding money overseas. Besides, any interest from a bank account is already taxed by Korea. But it's usually better to be safe than sorry. |
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Yaya
Joined: 25 Feb 2003
Location: Seoul
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| Posted: Sun May 15, 2011 8:41 pm Post subject: |
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| atwood wrote: |
| I'm surprised that no one has mentioned that, at least in some cases, the U.S. Embassy checks to see if you've been filing tax returns before issuing you a new passport. |
How often does this happen? I have never renewed my passport in Korea but will in four years. |
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atwood
Joined: 26 Dec 2009
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| Posted: Sun May 15, 2011 8:55 pm Post subject: |
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| Yaya wrote: |
| atwood wrote: |
| I'm surprised that no one has mentioned that, at least in some cases, the U.S. Embassy checks to see if you've been filing tax returns before issuing you a new passport. |
How often does this happen? I have never renewed my passport in Korea but will in four years. |
I guess it's common enough:
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The Internal Revenue Service recently decided to be clever. Their theory was to check an expatriates' tax status when the expat went into a U.S. embassy to renew his or her U.S. passport. However, unbeknownst to the IRS, the expats are no longer renewing their U.S. passports. What the expatriates are now doing is getting second passports from another nation before their U.S. passport expires.
Thus far the IRS has decided to target expatriates in the UK, Canada, Mexico, Germany, Italy, Hong Kong, Australia, Israel and Switzerland. According to census data and estimates of unfiled tax returns and unpaid tax, more tax is being avoided by Americans living in those countries than elsewhere.
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And so some ex-pats are getting a new passport rather then renewing.
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In addition, there is a requirement in law that all U.S. citizens possess a valid U.S. passport when outside the country. A U.S. citizen is prohibited from entering or leaving the U.S. on a foreign passport (if they are entitled to one). There is an "administrative fee" of $100 for U.S. citizens not in possession of a valid passport who attempt to enter the U.S. The kicker is this: when you go to your U.S. Embassy or Consulate in your country of residence to renew your passport, the consulate staff check your name and Social Security number with the Internal Revenue Service. If you have not filed tax returns in the past, your passport may not be renewed until you do file. Thus, you won't be able easily to re-enter the U.S., even if you are a dual citizen with a valid passport from your second country of citizenship.
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| Quote: |
| But from what I've read, even if the IRS doesn't realize now that an expat isn't filing, it could easily come to their attention if the person goes to renew a US passport, or gains a US inheritance, or applies to collect Social Security at retirement age. |
You should file. |
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