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pdxsteve
Joined: 29 Sep 2004
Location: Bundang
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 Posted: Tue Jun 19, 2007 6:06 am Post subject: |
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| Beej wrote: |
| The IRS has no way to verify how much money you made. Just say you made around 700 bucks... |
Unless you're keeping your money under your mattress, the IRS has plenty of ways of knowing how much money you made. Ever wonder why the Korean banks always copy your passport page for any foreign transaction? It's not just for the Korean government, let me tell ya. |
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mack4289
Joined: 06 Dec 2006
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| Posted: Tue Jun 19, 2007 6:20 am Post subject: |
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| I just spoke with a guy at the IRS who was concerned enough to tell me he was personally taking charge of my case. He said I did send Form 2555 but it's possible they misplaced it so I have to fax it to them tomorrow. Hopefully it's just a paperwork error. |
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Fresh Prince
Joined: 05 Dec 2006
Location: The glorious nation of Korea
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| Posted: Tue Jun 19, 2007 7:35 am Post subject: |
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| mack4289 wrote: |
| Fresh Prince wrote: |
| Were you in Korea prior to January as the 330 days doesn't have to start in January? If you were in Korea during the prior year then that counts too. |
Yeah my contract was from Aug '05 to Aug '06. I wonder if the following facts will help my case:
- I haven't earned any money in the US since Aug '04
- When I left Korea in Aug '06, I already had the job lined up for Japan
- When I left Japan, I had already been actively looking for January '07 work in Japan and Korea. I've even got emails to prove that. |
It's true that all worldwide income is taxed by the U.S. government however up to $82,400 is not taxed as long as you meet the 330 day physical presence test or were in a foreign country for an entire tax year (see quote below). If you were indeed in Korea for your entire contract of one year then you were clearly in Korea for 330 days and qualify for the exemption.
That means, all you have to do is file the correct form, I believe it is form 2555, and claim your income as exempt under the foreign earned income exclusion. You wouldn't have to pay any taxes as long as you qualify for the exclusion.
From what you have said, it sounds like you just didn't file the right form so the IRS doesn't know you qualify for the exemption.
| IRS wrote: |
2) How do I qualify for the foreign earned income exclusion?
To be eligible, you must have a tax home in a foreign country and be a U.S. citizen or resident alien. You must be either a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or you must be physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months. U.S. citizens may qualify under either test. The physical presence test applies to all resident aliens, while the bona fide residence test applies to resident aliens who are citizens or nationals of a country with which the United States has an income tax treaty in effect. |
http://www.irs.gov/publications/p54/ar02.html#d0e8032 |
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