Korean Job Discussion Forums

kimchikowboy · Joined: 24 Jan 2003

I've looked at the archives and I still need a bit of help. I've been working in Korea for two years, but because of family illness, I have to return during uni vacations to the US. I'm in the US for more than the 30 or so days which makes up the physical presence test for the IRS. However, my home now and for the future is Korea, and I maintain a home there even when I'm in the US. Would this pass the bona fide resident test and get me under the $80,000 exclusion? Or is there some sort of pro-rated payment system? I don't want to, and can't really afford to, give $4,000 or so to Uncle Sam, especially as I made it all overseas. I wanna be bona fide!

katydid · Joined: 02 Feb 2003 Location: Here kitty kitty kitty...

If you have worked in the States at any time you were home, you need to declare that income and possibly pay taxes on that. (I only worked for a month before I left for Korea last year, so I got all my money back.)
If you are an American citizen working here, you need to just declare to the IRS the income you have earned from your school. Your school can give you a form that will show what you made exactly, and how much Korean tax was taken out.
I had been under the impression that since I lived here and was not making anywhere near $80,000, I didn't need to do a thing. Not so. You at least need to tell Uncle Sam where you are, and what you are making, and why they can't have it. Smile

I imagine this is because if you came back to the States and the IRS saw you had a 5-year gap in between tax reports, they would get a bit suspicious, to say the least.
You should go to www.turbotax.intuit.com. That program REALLY helped me out earlier this year, and it was pretty easy to use.

Mody Ba · Joined: 22 May 2003

Katydid gave you very good advice.You might very well check out that website provided by katydid.I also suggest you look for a GOOD accountant(forget about people like H and R Block).
Overseas income can be quite tricky,and your situation sounds quite complicated.Katydid is right...you do need to file,even if you do not wind up paying any tax at all.Katydid is absolutely right....somewhere down the line if the IRS ever audits you(they may NEVER audit you,but nobody can guarantee that),you would not want to try and explain why you did not file for certain years and exactly how you were supporting yourself.File even if you do not owe any tax in the end,and then if they ever audit you ,you can just pull out your copies(be sure to keep copies) of your tax returns for the years in question.
I strongly advise that you think about getting a good accountant,hopefully one who has had some experience in doing overseas income.Sure,it will cost you a fee,but it will probably be worth it in the long run.Good luck.

HardyandTiny · Joined: 03 Jun 2003

that's a good question for HARDY!

Zyzyfer · Posted: Fri Aug 08, 2003 5:31 pm Post subject:

Okay, I've got a question. I accidentally didn't file this year, never got around to mailing off the form. Pure laziness. Uhhhhhhh.........should I still send it in, attach it to next year's form, let my dog eat it, or what?

Mody Ba · Joined: 22 May 2003

You should send it in as soon as possible.if you do not owe any taxes,no sweat at all.If you do owe taxes,there might be some penalty(usually not large),for filing late).When you send it in,be sure to keep a copy and also attach a note just explaining that you forgot.Be sure to keep copies of everything.It is better to file late than not to file at all.Cover yourself.

mokpochica · Joined: 21 Jan 2003 Location: Ann Arbor, MI

And my sister who is a tax accountant specializing in people who live/have lived overseas told me that we have a significantly later filing date than people who have just been living in the U.S. I think it was in July---so you are probably not very late at all. She's still working on taxes for people like us (actually she's working on mine right now) so i don't think it will be a big deal.

Mody Ba · Joined: 22 May 2003

Yeah,Mokpochica is right about the extended filing period....we get an extra four months(file by August 15 rather than April 15) for US federal income taxes.Although to get the full extension period,you have to send the IRS a request for extension(IRS form 4868).I am not sure,but I think people get sixty days extension automatically past the April 15 date if they are working overseas.Not sure on that one,but I am sure on the one that goes to August 15, because I did it this year.

simon77047 · Joined: 08 Mar 2003

I worked here in Korea for the entire year of 2002 and since I knew my school didn't report my income to the IRS, I didn't either. lol. I did file though and I only reported 401K distributions. (only because of the penalty) Any thoughts? Anyone?

JustCruizin' · Joined: 29 Jun 2003

OiGirl · Joined: 23 Jan 2003 Location: Hoke-y-gun

Do you think the IRS is going to believe you made and lived on NOTHING for a year? How are you going to explain this when you get audited a few years down the line?

If a family in the US fills out a federal free lunch form for their kids and writes $0 for income, they can be approved for one month only...the government does not believe that people can live on air.

JustCruizin' · Joined: 29 Jun 2003

As far as I know, they would have to prove I made the money, I wouldn't have to prove I didn't.

Plus with a passport full of stamps I'd just say I took a around the world and ended up in Korea.

But, I also didn't send money to my account back home either.

On the other hand, with the exemption you might as well claim the income, I just couldn't be bothered.

Mody Ba · Joined: 22 May 2003

Oigirl is right.There is always the chance you might get audited sometime in the future.There is no statute of limitations on tax liability.That does not mean you WILL get audited,but it is a possibility.Of course,it is everyone's individual business as to how they handle it,but I would take the time to do it right.And especially if your tax situation is complicated,I would suggest that you get a good accountant,because people on this board,including myself,cannot give you the expert tax advice you will need in a complicated situation.The advice I can give you, though is...cover yourself,get your taxes done right,do not try to cheat them or try to just forget about it.Don't let it come back to haunt you later in life.Life has enough problems without hassling with the IRS.And no, I have no vested interest,have never worked for the IRS or anything like that.