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  • kberger
  • Adventurer

    • 48

    • September 09, 2010, 10:05:48 pm
    • Wisconsin
Re: Questions and Answers for American Taxes
« Reply #420 on: September 25, 2016, 10:59:25 pm »
This is sort of a response to pohang and pecan.  It is not possible to contribute foreign earned income to a Roth IRA.  Income that that goes into a Roth has to be on a W-2.  That is a bummer about working overseas. 
Similar question and answer here:
https://ttlc.intuit.com/questions/2261307-problem-with-foreign-earned-income-and-roth-ira-contributions

Now, I'll go off on a bit of a tangent.  If someone has a 401k, 403b or a Simple IRA or something like that, there is something you may want to look into.  A 401k and those things are funded with pre tax income.  While in Korea, one thing you may want to do is convert some of that into a Roth.  While in Korea, your taxable US income is basicly zero.  So, you could convert some 401k money into a Roth, and you would report that amount as taxable income.  If you move an amount like $10,000 from a 401k to a Roth, there would be little to no taxes owed on that, and the Roth never gets taxed by the IRS again.


Re: Questions and Answers for American Taxes
« Reply #421 on: April 02, 2017, 03:21:13 am »
I've filed my taxes every year I've worked in Korea and always filed the foreign income exclusion. For 2016 taxes, I actually had a tax preparer do them for me, and they keep telling me I do not have to file form 2555 since Korea wouldn't have declared my income to the IRS and I don't have an actual W-2 from Korea. They even went and asked their boss to make sure.  :huh:

This goes against everything I have read and researched. I worked in Korea for five years and always submitted that form. Has anyone else been told this?? I think they are wrong, despite being tax professionals...


  • Pecan
  • The Legend

    • 3769

    • December 27, 2010, 09:14:44 am
    • Seoul
Re: Questions and Answers for American Taxes
« Reply #422 on: April 02, 2017, 06:32:41 am »
It sounds like you could be in a world of hurt if you ever end up on the IRS's radar.

Foreign Earned Income Exclusion - Requirements

To claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you must have foreign earned income, your tax home must be in a foreign country, and you must be one of the following:

  • A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year,

  • A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or

  • A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.


  • nimrand
  • Super Waygook

    • 489

    • April 07, 2013, 07:40:28 am
    • Lawrence, KS
Re: Questions and Answers for American Taxes
« Reply #423 on: April 02, 2017, 07:20:09 am »
I've filed my taxes every year I've worked in Korea and always filed the foreign income exclusion. For 2016 taxes, I actually had a tax preparer do them for me, and they keep telling me I do not have to file form 2555 since Korea wouldn't have declared my income to the IRS and I don't have an actual W-2 from Korea. They even went and asked their boss to make sure.  :huh:

This goes against everything I have read and researched. I worked in Korea for five years and always submitted that form. Has anyone else been told this?? I think they are wrong, despite being tax professionals...

May I ask who these tax professionals are?  I think you need to find new ones.


Re: Questions and Answers for American Taxes
« Reply #424 on: April 02, 2017, 11:43:56 am »
Hey, quick question here...

I sent a completed f2350 ("Application for Extension of Time To File U.S. Income Tax Return") back at the end of February so that I could meet the 330-day physical presence test at the end of April. I haven't had any confirmation from the IRS that this has been received, let along processed and accepted.

Should I be worried?


Re: Questions and Answers for American Taxes
« Reply #425 on: April 02, 2017, 12:48:30 pm »
I've filed my taxes every year I've worked in Korea and always filed the foreign income exclusion. For 2016 taxes, I actually had a tax preparer do them for me, and they keep telling me I do not have to file form 2555 since Korea wouldn't have declared my income to the IRS and I don't have an actual W-2 from Korea. They even went and asked their boss to make sure.  :huh:

This goes against everything I have read and researched. I worked in Korea for five years and always submitted that form. Has anyone else been told this?? I think they are wrong, despite being tax professionals...

May I ask who these tax professionals are?  I think you need to find new ones.

They're U.S. military. My husband is in the Air Force and there is a tax office on base that prepares their taxes for free.

I'm flabbergasted. She even went to ask her boss, whose rank is much higher, and he also said we don't need to report it. I think they're wrong but they kept insisting. :huh:


  • nimrand
  • Super Waygook

    • 489

    • April 07, 2013, 07:40:28 am
    • Lawrence, KS
Re: Questions and Answers for American Taxes
« Reply #426 on: April 02, 2017, 04:30:38 pm »
They're U.S. military. My husband is in the Air Force and there is a tax office on base that prepares their taxes for free.

I'm flabbergasted. She even went to ask her boss, whose rank is much higher, and he also said we don't need to report it. I think they're wrong but they kept insisting. :huh:

Well, the IRS's website says that those living abroad are taxed on their "worldwide income".  So, to convince me you don't need to report that income, you'd have to show me something that says that IRS doesn't consider employment income from a foreign country (e.g., Korea) is not part of your "worldwide income", which would be counter-intuitive (but then so is most of the tax code).

But, I'm pretty sure they are wrong, in that, technically, you are required to report that income, even if you don't have a W-2.  However, I'm not sure there is any actual penalty for not reporting it.  Afterall, if they audited you and discovered that income, it would contribute exactly $0 to your tax liability.


Re: Questions and Answers for American Taxes
« Reply #427 on: April 03, 2017, 08:49:02 am »
Hey, quick question here...

I sent a completed f2350 ("Application for Extension of Time To File U.S. Income Tax Return") back at the end of February so that I could meet the 330-day physical presence test at the end of April. I haven't had any confirmation from the IRS that this has been received, let along processed and accepted.

Should I be worried?

Okay, I just looked at the form again and there's a return address slip, plus a verification form that should denote whether or not your application was approved. I filled this in at the time (it was my own completed application that I pulled up for reference). A little worried that it's taken so long to get this back...


  • eastreef
  • Super Waygook

    • 272

    • November 02, 2009, 02:53:39 pm
    • 7 years at middle & high schools in Korea / Now a university in Thailand!
Re: Questions and Answers for American Taxes
« Reply #428 on: April 03, 2017, 10:38:29 am »
Many in the military, and others who are U.S. federal employees working overseas hear, and resent, that U.S. civilians working overseas donít pay U.S. taxes, but that U.S. federal employees have to pay.  BTW, I served on active duty for six years in the U.S. Navy.  Many federal employees also do not understand the process of U.S. civilians having to file, and then using Form 2555 for the Foreign Earned Income Exclusion.  If you dare (lol), ask them for an IRS link that supports their position.

I have been a U.S. expat for approximately 17 years, but I am not a tax expert or legal tax advisor.  The following is just my opinion and experience, and is not legal or tax advice.  Do your own research.

If you are filing as married and jointly, then you report your foreign (worldwide) income if it is above the minimum threshold.  See below.  You then exclude your foreign income using Form 2555.

If you are filing married but separately, then your husband does not have to include your income, but if you are a U.S. citizen and/or U.S. legal resident each of you then file separately, and you would report your foreign income and then exclude it per Form 2555.

I never received a W2 for my seven years in Korea and donít receive one now in Thailand.

I am married to a Thai national who works at the same school as me in Thailand.  For tax reasons we file Married and Jointly (I also have U.S. income), and thus we are required to include her foreign income.  We then complete a Form 2555 for me to exclude my foreign income and complete a Form 2555 to exclude her foreign income. 

BTW, she had to get a U.S. Taxpayer Identification Number (ITIN) for us to file married and jointly.  Because she got the ITIN she can be considered a U.S. tax resident and thus she can also take the Foreign Income Exclusion. 

We could file married and separately, and doing this would mean that I did not have to report her income on my U.S. tax form, and she would not have to file anything with the U.S. because she is a foreign national.  However, for us there was a tax advantage to file jointly.

Again, this is just my opinion and experience and is not legal or tax advice.  Check the IRS instructions on their website.  In the case of Foreign Income and filing married, the instructions are pretty much clear.

Quote
  https://www.irs.gov/businesses/income-from-abroad-is-taxable

If you are a U.S. citizen or resident alien, you must report income from all sources within and outside of the U.S. This is true whether or not you receive a Form W-2 Wage and Tax Statement,  a Form 1099 (Information Return) or the foreign equivalents.  See Publication 525, Taxable and Nontaxable Income, for more information.

General Filing Questions

https://www.irs.gov/uac/general-filing-questions

General Filing Questions

Am I Eligible to Apply for an Individual Taxpayer Identification Number?
Determine if you should file an application to receive an Individual Taxpayer Identification Number (ITIN).

Do I Need to File a Tax Return?

Determine if you're required to file a federal tax return or if you should file to receive a refund.

What Is My Filing Status?

Determine your filing status: Single, Head of Household, Married Filing Jointly, Married Filing Separately, or Qualifying Widow(er) with Dependent Child.
Who Can I Claim as a Dependent?

Determine who you can claim as a dependent.

How Do I File a Deceased Person's Tax Return?

Determine who must file a decedentís individual tax return, how the tax return is notated, and the timeframe for filing the return.

What Is the Due Date of My Federal Tax Return or Am I Eligible to Request an Extension?
Determine the due date of your federal tax return or whether you're eligible to request an extension.

What Is the Simplest Form to Use to File My Taxes?

Determine the simplest form to use to file your federal income tax return.

Can I Claim My Personal and/or Spousal Exemption?

Determine whether you can claim your own exemption or your spouseís.

How Much Can I Deduct for Each Exemption I Claim?

Determine how much can be deducted for each exemption claimed on your return.

Can I or My Spouse Claim Part of a Refund Being Applied Toward a Debt Owed by the Other Spouse?

Decide if you should file a claim for part of a refund that was jointly applied toward a spouseís past due debt for which you weren't responsible (federal/state tax, child/spousal support, student loan, etc.).
         
ďAll of this has happened before, and will happen again.Ē


Re: Questions and Answers for American Taxes
« Reply #429 on: May 23, 2017, 03:42:33 pm »
I am a U.S citizen and I have been living in Korea for almost 3 years now and I haven't been filing my taxes ( Yes, I know I'm an idiot ) . What forms do I need to get from my school? I want to get this fixed asap. I also have been paying student loans that I can deduct from. I don't want to get into too much trouble with Uncle Sam. Can someone please guide me on what I should do? Can I just use turbo tax or something like that?


  • Pecan
  • The Legend

    • 3769

    • December 27, 2010, 09:14:44 am
    • Seoul
Re: Questions and Answers for American Taxes
« Reply #430 on: May 23, 2017, 06:10:04 pm »
I am a U.S citizen and I have been living in Korea for almost 3 years now and I haven't been filing my taxes ( Yes, I know I'm an idiot ) . What forms do I need to get from my school? I want to get this fixed asap. I also have been paying student loans that I can deduct from. I don't want to get into too much trouble with Uncle Sam. Can someone please guide me on what I should do? Can I just use turbo tax or something like that?
Simply file the last three years now, before you get a letter from the IRS.

You wouldn't have owed anything, so it's not going to be an issue.

You don't need anything from your school, just get the income statement from your local tax office (in English).


Re: Questions and Answers for American Taxes
« Reply #431 on: May 24, 2017, 07:34:18 am »
I am a U.S citizen and I have been living in Korea for almost 3 years now and I haven't been filing my taxes ( Yes, I know I'm an idiot ) . What forms do I need to get from my school? I want to get this fixed asap. I also have been paying student loans that I can deduct from. I don't want to get into too much trouble with Uncle Sam. Can someone please guide me on what I should do? Can I just use turbo tax or something like that?

I got behind at one point, and then just basically filled out the forms. You can do it yourself for free by downloading the necessary PDFs from the IRS website. There is also an English International line that you can call, and they will tell you exactly what needs to be done and which forms to fill out. I have been filing simple taxes from here for some years, and I have never needed any extra paperwork. I advise that you call the help line, as they helped me sort out something from last year...Helped me clear 4 grand owed from my name, so they are good for something.


  • thunderlips
  • Hero of Waygookistan

    • 1727

    • June 07, 2012, 10:01:55 am
    • South Korea
Re: Questions and Answers for American Taxes
« Reply #432 on: May 24, 2017, 07:52:01 am »
I am a U.S citizen and I have been living in Korea for almost 3 years now and I haven't been filing my taxes ( Yes, I know I'm an idiot ) . What forms do I need to get from my school? I want to get this fixed asap. I also have been paying student loans that I can deduct from. I don't want to get into too much trouble with Uncle Sam. Can someone please guide me on what I should do? Can I just use turbo tax or something like that?

Yep do it yourself for free. Get the forms here: https://www.irs.gov/forms-pubs
If you claim the foreign earned tax exemption form 2555 you won't get a credit for student loans, but if you earned only a little for the years you may be better off filing and claiming your income. Depends on how much you earned.


Re: Questions and Answers for American Taxes
« Reply #433 on: May 24, 2017, 08:46:57 am »
Wow, thanks for the help guys. That is tremendously helpful.I have one more follow up question that is semi related to this topic so I hope the mods don't move it. I am wanting to start investing. I would like to invest in index funds but I feel more comfortable keeping the investments in U.S markets. I feel like an idiot for asking, but what is the process for keeping a U.S address on file? I have been using my fathers address to get U.S mail. I want to declare to the U.S government that I have been receiving foreign income so that everything is tidy and orderly with them, but at the same time I don't want to be declared a non U.S resident because it may make it difficult to put funds into a brokerage account. I would like to still declare my fathers address for U.S mail, but I also don't want to get in trouble for not declaring  my foreign income. Is it possible to keep a U.S address on file and also declare foreign income?  I know my questions are a bit confusing, but hopefully someone can help.


  • thunderlips
  • Hero of Waygookistan

    • 1727

    • June 07, 2012, 10:01:55 am
    • South Korea
Re: Questions and Answers for American Taxes
« Reply #434 on: May 24, 2017, 08:50:50 am »
Wow, thanks for the help guys. That is tremendously helpful.I have one more follow up question that is semi related to this topic so I hope the mods don't move it. I am wanting to start investing. I would like to invest in index funds but I feel more comfortable keeping the investments in U.S markets. I feel like an idiot for asking, but what is the process for keeping a U.S address on file? I have been using my fathers address to get U.S mail. I want to declare to the U.S government that I have been receiving foreign income so that everything is tidy and orderly with them, but at the same time I don't want to be declared a non U.S resident because it may make it difficult to put funds into a brokerage account. I would like to still declare my fathers address for U.S mail, but I also don't want to get in trouble for not declaring  my foreign income. Is it possible to keep a U.S address on file and also declare foreign income?  I know my questions are a bit confusing, but hopefully someone can help.

Yes keeping a US address won't affect your filing status.


  • Pecan
  • The Legend

    • 3769

    • December 27, 2010, 09:14:44 am
    • Seoul
Re: Questions and Answers for American Taxes
« Reply #435 on: May 24, 2017, 10:07:37 am »
I don't want to be declared a non U.S resident...
Are you aware of the tax implications of this?

I wouldn't recommend it.


Re: Questions and Answers for American Taxes
« Reply #436 on: May 24, 2017, 11:07:51 am »
I don't want to be declared a non U.S resident...
Are you aware of the tax implications of this?

I wouldn't recommend it.

I thought it was clear that I'm an idiot. I am not aware. I want to keep U.S residency to make it easier to invest, but I don't want to pay absurd tax rate. What would be the tax implications of this?


  • Pecan
  • The Legend

    • 3769

    • December 27, 2010, 09:14:44 am
    • Seoul
Re: Questions and Answers for American Taxes
« Reply #437 on: May 24, 2017, 11:12:58 am »
Well, if the last two years were your first two years here (the two you didn't file), you would be OK with doing that, thanks to the 2 year exemption.  However, after that, if you don't have an exclusion, you will owe taxes to the IRS (so much for "no double taxation"), though you are paying taxes in the ROK, as well.

I tiny bit of elbow grease on your part will help you to wrap your head around the above.

Best of luck.


  • ashwalton
  • Adventurer

    • 60

    • September 09, 2016, 09:25:25 am
    • Seoul, South Korea
    more
Re: Questions and Answers for American Taxes
« Reply #438 on: March 06, 2018, 07:44:47 am »
Hello, this is the first year where I have lived in SK and only worked in SK and I need to file my taxes in the USA. I have been told to file a form 2555 but my mom, who does my taxes and has power of attorney over me, says that I need a document from the school that has my yearly wage for 2017. Does this document exist? and if it did wouldnt it be 100% in Korean? I am an EPIK teacher and only one CT can speak English but she isn't in charge of my paperwork and has no idea what I need. Thanks for any help!

*I am still within the two year tax exception for Korea if that affects anything.


Re: Questions and Answers for American Taxes
« Reply #439 on: March 06, 2018, 08:02:16 am »
Hello, this is the first year where I have lived in SK and only worked in SK and I need to file my taxes in the USA. I have been told to file a form 2555 but my mom, who does my taxes and has power of attorney over me, says that I need a document from the school that has my yearly wage for 2017. Does this document exist? and if it did wouldnt it be 100% in Korean? I am an EPIK teacher and only one CT can speak English but she isn't in charge of my paperwork and has no idea what I need. Thanks for any help!

*I am still within the two year tax exception for Korea if that affects anything.

You've got a few options, but the easiest is to visit the person who handles the financial affairs of the school. This person will be in the administration office (in my experience, this office is usually located on the first floor of the school, but it can be anywhere), and is normally responsible for debiting money for lunches and paying out salaries, including yours. You can ask this person for your Wage Earner Income Statement (근로소득 원천징수영수증(근로소득 지급 명세서). Yes, it'll be in Korean, but you can look up the translations for what is what and write them down.

If you've been receiving your pay stubs, you can also just use those.

You can also visit your local tax office for your Certificate of Income (소득금액증명).

Reference this site:

http://www.korvia.com/filing-us-taxes-from-korea/

Another option would be to register on the hometax.go.kr website, and download the Year-end Tax Settlement document from there (more info on that here: http://www.korea4expats.com/article-year-end-tax-settlement.html)... but I think you'll need to visit your bank for a security certificate first (which, once they set you up, you'll need to finalize on a PC computer with Internet Explorer, and download the certificate from there), because you'll need it to access the info. More on that here.

More about the Year-end Tax Settlement doc here.
« Last Edit: March 06, 2018, 08:04:44 am by Chinguetti »