Korean Job Discussion Forums

[mack4289]

I got a letter today from the IRS asking me for $2,124 in taxes for this past year. I only earned 25,100 last year and it was all overseas. They claim that 16,650.00 of this is taxable income. I know if you spend a certain amount of time in the US during the year you can get taxed but I'm pretty sure I was under that limit (I spent roughly 7 1/2 weeks in the US in 2006). What am I missing here?

Let me quote the letter: "We changed the amount of total income on Line 22 of your Form 1040 because there was an error in computation. (they changed my income from my calculation of 25,200 to their calculation of 25,100).

We changed the amount claimed as standard deduction on Line 40 of your Form 1040 (they changed it from my calculation of 21,900 to their calculation of 16,650.00):
- No amount was entered for a standard deduction, or
- The amount entered for standard deduction was incorrect for the filing status claimed on your return.

We changed the amount of tax on Line 44 of our Form 1040. The amount entered was incorrect based on your taxable income and filing status."

Here's the chart they included:

Line Item on Your Return Your Figures IRS Figures
Adjusted Gross Income 25,200.00 25,100.00
Taxable Income 21,900.00 16,650.00
Total Tax .00 2,124.00
Amount of Underpaid Tax 2,124.00
Penalties (computed below, if applicable) .00
Interested computed through May 28,2007 20.11
Total amount owed 2,144.11

[mindmetoo]

[mack4289]

It looks like it's an issue of residency. I lived in Korea from January to August of last year, was home from to August to September, then was in Japan from September to December, then was home from December to February. If you really want to get into the details of it, you can go to Chapter 4 of this IRS document (http://www.irs.gov/pub/irs-pdf/p54.pdf).

[CeleryMan]

You may have forfeited your tax exclusion benefits given your 7.5 week stay in the US in '06. If you don't pass the 'bonafide residency' test (330 days anywhere outside the US, Uncle Sam will take his cut... even if it's WON.



[/quote]

[flakfizer]

Yeah, 7 1/2 weeks is too long. You have to spend 330 days out of the States to pass the test. That only allows you about 5 weeks in the States.

[hogwonguy1979]

try using the tax home test, thats what I use, it gets you around the 330 day out of the us requirement

you can prove it via your visa status or your contract. then again we've been here for years so we can prove it

you might want to get with h&r block about this

[animalbirdfish]

What do you (American) folks submit as proof of your Korean income, in lieu of the W forms that we get in the States?

[hogwonguy1979]

[Fresh Prince]

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.

[cbclark4]

"The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin." (Sam Clemens)

[mack4289]

[dogshed]

I see no mention in your post that you did a 2555. This may be
part of your issue. You can't just tell them the income is overseas.
You have to fill out the proper forms. I'm guessing you can
fix all of this by filling out an amended return.

Ask the IRS, but double check everything they tell you. Look at
the PDF documents instead of the html versions on the IRS
website if possible when talking to the IRS reps
because then you can refer to page numbers.

Read my thread or give it to your tax preparer.

http://forums.eslcafe.com/korea/viewtopic.php?t=87567&highlight=tax+exclusion

[pdxsteve]

[Beej]

The IRS has no way to verify how much money you made. Just say you made around 700 bucks...

[I-am-me]

Has anyone not bothered to even fill out an income tax form for several years?