Korean Job Discussion Forums

[gdyanks]

I'm likely going to sign up for H&R Block and check with them, but I'll ask this here anyway should someone know...

I started working for SMOE on August 2007 and am still here now. I'll need to file 2007 income taxes for my employment at another job back home earlier that year, and I am trying to ascertain whether or not I will also need to report my Korean income from the beginning of my SMOE employment to the end of the 2007 tax year.

Many have pointed out the tax exemption, but that applies to a full year's worth of employment and housing overseas. As it stands, I have not fulfilled a whole year yet, so I wonder if I need to report that which fell in the 2007 tax year. Is it possible to defer the reporting of that 2007 income and how would one go about it?

[Bibbitybop]

File an extension right now so you can prepare your taxes once you have been out of the USA for 330 days. If you claim the 330 day mark in August, you will have until September (30 days later) to file.

[elliemk]

The answer to your question is here: http://www.irs.gov/publications/p54/ch01.html#d0e573

You can get an automatic two month extension to file. But you have to pay whatever taxes you will owe with that extension. You can also get longer extensions in order to meet the qualifying rules for foreign income tax exclusion. Read the above material to find out all the ins and outs. But again, if you don't want to pay interest, pay what you owe with your FIRST extension! Good luck.

[matthews_world]

All Americans working abroad would need to fill out the 2555 in order to report overseas income no matter when they started working abroad.

I believe that if you've been here less than a certain amount of time, you would not need the 2555 but I might be mistaken.

Remember, Americans who have stateside income for the year still need to collect the amounts on their W-2s and report it.

[Ut videam]

You'll want to file Form 2350, Application for Extension of Time to File U.S. Income Tax Return for U.S. Citizens and Resident Aliens Abroad Who Expect to Qualify for Special Tax Treatment. This is the form that allows you to apply for the extension you'll need to claim the foreign earned income exemption.

Also, follow the link provided above by elliemk to IRS Publication 54, which is the go-to guide for U.S. expat tax issues.

[gdyanks]

All helpful, thanks guys. I had poured through the IRS 54 guidelines earlier, but that's a lot of reading and I kept missing my target. Thanks again.

[jellobean]

You DO NOT want to file the regular extension.... There is a special form to file that allows you to wait until you meet the 1 year rule to file... If you extend with the regular form you can only extend until Dec 15... Some of the regs require a full calendar year (ie Jan1-Dec31) rather than one year of working...

I made the extension mistake and by the time I found the proper form they would no longer accept it... I had to file and then later ammend (a total pain) because the form must be filed by Apr 15th to get the mega-extension...

Sorry I don't know the form name and don't have time to look for it now... I'll try to find time later...

[Ut videam]

jellobean:

As I posted above, Form 2350 is the correct form to file for an extension to qualify for the foreign earned income exemption.

Also, for a variety of reasons, most teachers in Korea will want to use the physical presence test to qualify for the exemption. The physical presence test is not based on a calendar year, but rather 330 days of physical presence outside the US during ANY consecutive 12 months. If any part of that 12 month period falls within a given tax year, one can claim the exemption for that tax year on a pro rata basis.