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tokkibunni8
Joined: 13 Nov 2009
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 Posted: Sun Feb 07, 2010 10:47 pm Post subject: |
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Simple question... I left for the states on December 23rd, 2008 and returned back to Korea on January 10th, 2009.
On the tax instruction booklet, it says that in order to satisfy the Bona Fide Residence Test I must be abroad for an entire tax year (Jan. 1st-Decem. 31st).
Because I was gone for the first ten days of 2009, does that mean I failed the Bona Fide Test even though i was still earning income in Korea while I was visiting home? |
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young_clinton
Joined: 09 Sep 2009
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| Posted: Mon Feb 08, 2010 4:16 pm Post subject: |
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can somebody please tell me in plain english, In order for me to not have to pay taxes for the tax year of 2008-2009, did i have to be a resident of Korea for 330 days within that tax year? I get sick and tired of this IRS language that the IRS uses.
For instance I didn't get here untill April 3, 2008 and I am leaving April 3 2010. So........................................... |
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tired of LA
Joined: 06 Nov 2006
Location: Seoul
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| Posted: Mon Feb 08, 2010 6:05 pm Post subject: |
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| arice05 wrote: |
I am so confused! Can someone please help me? I've read all the posts but I'm feeling a bit overwhelmed...
OK. I filed form 8802 and I got a letter from the IRS saying they accepted it.
Do I also file form 2555, and do I do so at the same time that I file the 1040? I know I need to do the long version of form 1040.
I arrived here at the very end of Oct. 2009. My contract started the first week of Nov. 2009 and is a one year contract.
However, I am going home (USA) Feb. 19-28. Does that mean that I will have to pay taxes for the foreign income, because I won't be out of the USA for 330 days? Do these days have to consecutive? I don't think they do, actually.
Furthermore, I have an F-4 Visa, but I am definitely an American citizen.
Thank you in advance for your help. Sorry I am incompetent at taxes  |
No, you won't have to pay taxes, you just need to be abroad for at least 330 days out of a 12 month period. You don't have to be abroad for 330 consecutive days to qualify.
| tokkibunni8 wrote: |
Simple question... I left for the states on December 23rd, 2008 and returned back to Korea on January 10th, 2009.
On the tax instruction booklet, it says that in order to satisfy the Bona Fide Residence Test I must be abroad for an entire tax year (Jan. 1st-Decem. 31st).
Because I was gone for the first ten days of 2009, does that mean I failed the Bona Fide Test even though i was still earning income in Korea while I was visiting home? |
While it is true you won't qualify under the bona fide residence test, you can still qualify under the physical presence test. See above.
| young_clinton wrote: |
can somebody please tell me in plain english, In order for me to not have to pay taxes for the tax year of 2008-2009, did i have to be a resident of Korea for 330 days within that tax year? I get sick and tired of this IRS language that the IRS uses.
For instance I didn't get here untill April 3, 2008 and I am leaving April 3 2010. So........................................... |
To meet the physical presence test, you basically cannot be in the US for at least 330 days out of a 12 month period. So as long as you don't go back to the states for a extended vacation during your time in Korea, you're all good. |
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Konglishman
Joined: 14 Sep 2007
Location: Nanjing
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| Posted: Wed Feb 10, 2010 1:35 am Post subject: |
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| OiGirl wrote: |
| Konglishman wrote: |
| OiGirl wrote: |
Question:
If we are a married couple, both with income only in Korea, reported on Form 2555, is it best to file jointly or separately? I just got married last year. |
That is an excellent question, OiGirl. In fact, you seem to have tripped me up. Perhaps, I will give the IRS a call on Monday to find out.
By the way, based on something I vaguely recall reading, I suspect that it will make some sort of difference depending on whether your spouse is an American or not. |
My spouse is a Permanent Resident in the US now. |
Unfortunately, I have had a lot of last minute errands to take care of before flying back to Korea. So, I have not yet had a chance to call the IRS and ask them about this. However, I should have time now tomorrow. |
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DeMayonnaise
Joined: 02 Nov 2008
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| Posted: Wed Feb 10, 2010 6:42 am Post subject: |
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Sure is a helluva lot of work to not owe any money 
What if I didn't make any money in the US before I came to Korea, and didn't make $90,000 a year in Korea? What would the government do if I forgot to file?
And oh yeah, when I left the states after visiting home, I didn't go through customs. By some magical layout of Ohare airport, I managed to transfer flights without ever going through customs (Isn't homeland security great?). I didn't realize it til I was already in the air headed for Seoul. That might mess up the "physical presence test". |
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Konglishman
Joined: 14 Sep 2007
Location: Nanjing
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| Posted: Wed Feb 10, 2010 10:07 am Post subject: |
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| DeMayonnaise wrote: |
Sure is a helluva lot of work to not owe any money
What if I didn't make any money in the US before I came to Korea, and didn't make $90,000 a year in Korea? What would the government do if I forgot to file? |
Maybe, the IRS would not notice if you didn't file. Or maybe, the IRS would audit you. Do you really want to take that risk?
| DeMayonnaise wrote: |
| And oh yeah, when I left the states after visiting home, I didn't go through customs. By some magical layout of Ohare airport, I managed to transfer flights without ever going through customs (Isn't homeland security great?). I didn't realize it til I was already in the air headed for Seoul. That might mess up the "physical presence test". |
I am surprised that there was not some sort of national outcry against your breach of security. 
But to answer your question, I do not believe that the IRS is checking the immigration records. If they ever decided to audit you, they would likely just want some sort of record of your flights in and out of the USA. |
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naturegirl321
Joined: 18 Jul 2006
Location: Home sweet home
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| Posted: Wed Feb 10, 2010 11:43 am Post subject: |
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| DeMayonnaise wrote: |
Sure is a helluva lot of work to not owe any money
What if I didn't make any money in the US before I came to Korea, and didn't make $90,000 a year in Korea? What would the government do if I forgot to file?
And oh yeah, when I left the states after visiting home, I didn't go through customs. By some magical layout of Ohare airport, I managed to transfer flights without ever going through customs (Isn't homeland security great?). I didn't realize it til I was already in the air headed for Seoul. That might mess up the "physical presence test". |
YOu don't HAVE to file if you meet the exemptions, but you'd probably have to make very very little money. Depends on when you came to Korea. Was it in Dec? You might get out of filing, BUT, do you have an IRA, or bank account that gives you interest? All that will bump up your earnings for the year.
Doesn't matter if you didn't go through customs in the US or immigrations when you leave. No one does when they leave. Americans, or foreigners. I personally think they do it so they don't have to prosecute the illegal immigrants, but that's another topic.
YOu'lll get a Korean stamp when you enter. SO. You have your ENTRY stamp to the US and your entry stamp to Korea, as long as time in the US is less than 30 or 35? then you should be fine for the physical presence test. |
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tired of LA
Joined: 06 Nov 2006
Location: Seoul
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| Posted: Wed Feb 10, 2010 5:20 pm Post subject: |
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| DeMayonnaise wrote: |
Sure is a helluva lot of work to not owe any money
What if I didn't make any money in the US before I came to Korea, and didn't make $90,000 a year in Korea? What would the government do if I forgot to file?
And oh yeah, when I left the states after visiting home, I didn't go through customs. By some magical layout of Ohare airport, I managed to transfer flights without ever going through customs (Isn't homeland security great?). I didn't realize it til I was already in the air headed for Seoul. That might mess up the "physical presence test". |
More than likely nothing would happen if you didn't file. But if, like Konglisman said, you get audited, you would end up owing some fines for failing to file a tax return even if you would have owed nothing. It's really not that hard and it's even easier if you use a tax return program that will walk you through it.
Like naturegirl said, there's no customs or immigration control when leaving the US. The government doesn't really care about people leaving the country, only coming in. They might not know that you've left, but when you return, they will know because you will go through immigration. |
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DeMayonnaise
Joined: 02 Nov 2008
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| Posted: Wed Feb 10, 2010 11:30 pm Post subject: |
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Alright thanks guys. I came to Korean in August, with debt to my name and made hardly any money the previous year I was in college, unemployed, and paying for everything with the credit card. I figured I'd pay it off when I got to Korea, which I did. I'm going home next week for a visit anyways, so will see if I can take care of it there.
Crazy that there's no customs for leaving the US. I imagine all those anti-immigration, right-wing, tea baggin' folk would be upset about it, but since very few of them have passports, they probably don't even know! |
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I-am-me
Joined: 21 Feb 2006
Location: Hermit Kingdom
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| Posted: Wed Feb 10, 2010 11:41 pm Post subject: |
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| I havent filed in more than 4 years. Its not IRS's business what I do overseas. I dont make over 87,000 so why bother when its exempted anyways? For all they know I am living under a bridge in San Francisco. |
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Konglishman
Joined: 14 Sep 2007
Location: Nanjing
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| Posted: Thu Feb 11, 2010 12:06 pm Post subject: |
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| Konglishman wrote: |
| OiGirl wrote: |
| Konglishman wrote: |
| OiGirl wrote: |
Question:
If we are a married couple, both with income only in Korea, reported on Form 2555, is it best to file jointly or separately? I just got married last year. |
That is an excellent question, OiGirl. In fact, you seem to have tripped me up. Perhaps, I will give the IRS a call on Monday to find out.
By the way, based on something I vaguely recall reading, I suspect that it will make some sort of difference depending on whether your spouse is an American or not. |
My spouse is a Permanent Resident in the US now. |
Unfortunately, I have had a lot of last minute errands to take care of before flying back to Korea. So, I have not yet had a chance to call the IRS and ask them about this. However, I should have time now tomorrow. |
OiGirl,
I just spoke with the IRS. Generally speaking, it is most beneficial to file jointly. Also, it turns out that if you file jointly then your Foreign Income Exclusion is doubled. In fact, on page 19 of Publication 54, you will find the following.
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| If both you and your spouse work abroad and each of you meets either the bona fide residence test or the physical presence test, you can each choose the foreign earned income exclusion. You do not both need to meet the same test. Together, you and your spouse can exclude as much as $182,800. |
http://www.irs.gov/pub/irs-pdf/p54.pdf |
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Konglishman
Joined: 14 Sep 2007
Location: Nanjing
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| Posted: Thu Feb 11, 2010 12:16 pm Post subject: |
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| I-am-me wrote: |
| I havent filed in more than 4 years. Its not IRS's business what I do overseas. I dont make over 87,000 so why bother when its exempted anyways? For all they know I am living under a bridge in San Francisco. |
If you were ever to get audited, you would end up owing a lot of taxes. So, why take that risk when it really is not that difficult to file tax returns? Oh, and by the way, the Foreign Income Exclusion is now $91,400. |
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naturegirl321
Joined: 18 Jul 2006
Location: Home sweet home
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| Posted: Thu Feb 11, 2010 3:28 pm Post subject: |
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| Konglishman wrote: |
| Konglishman wrote: |
| OiGirl wrote: |
| Konglishman wrote: |
| OiGirl wrote: |
Question:
If we are a married couple, both with income only in Korea, reported on Form 2555, is it best to file jointly or separately? I just got married last year. |
That is an excellent question, OiGirl. In fact, you seem to have tripped me up. Perhaps, I will give the IRS a call on Monday to find out.
By the way, based on something I vaguely recall reading, I suspect that it will make some sort of difference depending on whether your spouse is an American or not. |
My spouse is a Permanent Resident in the US now. |
Unfortunately, I have had a lot of last minute errands to take care of before flying back to Korea. So, I have not yet had a chance to call the IRS and ask them about this. However, I should have time now tomorrow. |
OiGirl,
I just spoke with the IRS. Generally speaking, it is most beneficial to file jointly. Also, it turns out that if you file jointly then your Foreign Income Exclusion is doubled. In fact, on page 19 of Publication 54, you will find the following.
| Quote: |
| If both you and your spouse work abroad and each of you meets either the bona fide residence test or the physical presence test, you can each choose the foreign earned income exclusion. You do not both need to meet the same test. Together, you and your spouse can exclude as much as $182,800. |
http://www.irs.gov/pub/irs-pdf/p54.pdf |
I elect NOT to file jointly simply because it's non of their business how much my husband makes. He's not a US citizen or resident and doesn't have to file. Also, I tried to get him an ITIN number twice. First time they sent back the passport, but no number, second time, they lost the docs and said we hadnt' sent any.
By filing separately, half the money we get jointly, like renting or interest, I simply don't have to declare since that's his half. |
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Konglishman
Joined: 14 Sep 2007
Location: Nanjing
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| Posted: Thu Feb 11, 2010 3:34 pm Post subject: |
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| naturegirl321 wrote: |
| Konglishman wrote: |
| Konglishman wrote: |
| OiGirl wrote: |
| Konglishman wrote: |
| OiGirl wrote: |
Question:
If we are a married couple, both with income only in Korea, reported on Form 2555, is it best to file jointly or separately? I just got married last year. |
That is an excellent question, OiGirl. In fact, you seem to have tripped me up. Perhaps, I will give the IRS a call on Monday to find out.
By the way, based on something I vaguely recall reading, I suspect that it will make some sort of difference depending on whether your spouse is an American or not. |
My spouse is a Permanent Resident in the US now. |
Unfortunately, I have had a lot of last minute errands to take care of before flying back to Korea. So, I have not yet had a chance to call the IRS and ask them about this. However, I should have time now tomorrow. |
OiGirl,
I just spoke with the IRS. Generally speaking, it is most beneficial to file jointly. Also, it turns out that if you file jointly then your Foreign Income Exclusion is doubled. In fact, on page 19 of Publication 54, you will find the following.
| Quote: |
| If both you and your spouse work abroad and each of you meets either the bona fide residence test or the physical presence test, you can each choose the foreign earned income exclusion. You do not both need to meet the same test. Together, you and your spouse can exclude as much as $182,800. |
http://www.irs.gov/pub/irs-pdf/p54.pdf |
I elect NOT to file jointly simply because it's non of their business how much my husband makes. He's not a US citizen or resident and doesn't have to file. Also, I tried to get him an ITIN number twice. First time they sent back the passport, but no number, second time, they lost the docs and said we hadnt' sent any.
By filing separately, half the money we get jointly, like renting or interest, I simply don't have to declare since that's his half. |
In your case, I guess that filing separately makes the most sense. However, as OiGirl indicated, her husband is a permanent resident. So, I suspect that filing jointly might make the most sense for her. |
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naturegirl321
Joined: 18 Jul 2006
Location: Home sweet home
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| Posted: Thu Feb 11, 2010 3:40 pm Post subject: |
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I definitely agree. Which is why we're considering never living in the US. Taxes and mortgages are a good reason to stay out as long as possible  |
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