Korean Job Discussion Forums

Omkara · Joined: 18 Feb 2006 Location: USA

I'm sure this one's been done to death. But, kick it once for me.

I've all but chosen to pay Korean taxes instead of getting them waived, since it is cheaper to pay korean taxes. Do any of you judge this as an error?

Omkara · Joined: 18 Feb 2006 Location: USA

Here's a link I found that may be helpful to others:

http://www.teachkoreanz.com/contract/taxes.htm

As I understand it so far--and I may be wrong--, it is far cheaper to pay taxes here than it is in the US. It is 3-5%. Then, there is a 4.5% pension tax. I believe this is refundable. But my worry is that I'll get nailed somewhere down the line if I pay the Korean taxes but not the US taxes.

Lend my your wisdom! I've only got a few hours to get this figured out.

Drunken Monkey · Joined: 17 Jan 2007

Didnt really want to put this up on the board.

I am from the UK, I am not a teacher.

But, for what its worth i get paid in both countries, but i only pay tax in Korea. The UK has a "Tax agreement" with Korea and many other countries. A lot of it depends on how long you spend away from the UK or whatever country you are from in any given tax year.

Cheers

CeleryMan · Joined: 12 Apr 2007 Location: Seoul

US Expats are subject to the local pension + "mysterious" 3.5% tax. Uncle Sam can't tax you for State and Federal "if and only if" you pass the "bona-fide" resident test. In simple terms, you have a 35 day allowance each calendar year to return home. If you exceed this amount, you forfeit your foreign income tax exclusion benefits (up to $80k) and risk paying taxes ....YUCK!

Omkara · Joined: 18 Feb 2006 Location: USA

So, if I am here for the full year without going home for more than 30 days, and I do not do the residency certification in order to avoid paying Korean taxes, do I come out financially ahead? (Not to mention avoiding dealing with the tedious process of applying for the certification. . .)

Drunken Monkey · Joined: 17 Jan 2007

You need to stop thinking of it in terms of a full year, but a full tax year. That is where they will get you.

Omkara · Joined: 18 Feb 2006 Location: USA

Good point, about the tax year. Which is the American tax year? April to April?

Omkara · Joined: 18 Feb 2006 Location: USA

May 31- May 1: the tax year.

Colorado · Posted: Mon Apr 23, 2007 6:57 pm Post subject:

Holy H&R Block!
This is ridiculous.
The tax year is the same as the regular year. It starts January 1 and ends December. 31.
You just need to have lived outside the US for at least 330 out of those 365 days to be eligible for the overseas exemption from paying US taxes.

Omkara · Joined: 18 Feb 2006 Location: USA

okay, I see. it's the Korean tax year which is from may to may then. Thanks for pointing that out. (I've got a cold and my thinking reflects it.)

Colorado · Posted: Mon Apr 23, 2007 7:04 pm Post subject:

I think you're ok paying Korean taxes, especially if you are elgible for the US foreign income exemption. You'll probably get a Korean tax refund as well.

kat2 · Joined: 25 Oct 2005 Location: Busan, South Korea

The other point missing from this discussion is that AMericans get a tax exemption from paying US tax on teh first US$70,000 (could be 80?) they earn overseas. Just make sure youget a knowledgable accountant in the states to file for you. I paid zero US tax this year and got a $40 refund for some telephone tax refund that all AMericans get this year! Bazing!

Colorado · Posted: Mon Apr 23, 2007 8:06 pm Post subject:

Mashimaro · Joined: 31 Jan 2003 Location: location, location

Hopefully all those who love to spout on about their 'legal' privates

DCJames · Joined: 27 Jul 2006