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  • Joss
  • Adventurer

    • 37

    • June 18, 2010, 01:18:08 pm
    • Busan, south korea
Must pay MAJOR American tax during second year in Korea??
« Reply #60 on: March 04, 2011, 01:51:32 am »
Hey guys,

I know the taxation question has been beaten to death on this site, but after much searching I haven't found and comments or threads reflecting my own circumstances. I know there were a few of you with a thorough knowledge of, and great advice about the tax situation in Korea. I was hoping you could offer some insight!

This is my second year in Korea. I took two months off between contracts, and lived in the US for that time. I didn't have to pay taxes last year, but this year, because I "haven't lived here more than 330 days", I have to pay taxes on my full income. They are asking for around $2,000.

This was really unexpected and was wondering if anyone knew of a similar circumstance. Any info would be greatly appreciated! Much thanks!



Re: Must pay MAJOR American tax during second year in Korea??
« Reply #61 on: March 04, 2011, 05:24:58 am »
That's true, Deajon, but in order to qualify for that exclusion using form 2555, you need to meet some criteria, one of which is being abroad for over 330 days.  If the OP didn't meet any of the other two criteria, and was home for two months between contracts, then it's possible they aren't eligible for that exclusion.


  • torstrom
  • Veteran

    • 84

    • May 19, 2010, 07:46:52 am
    • Hwaseong
Re: Must pay MAJOR American tax during second year in Korea??
« Reply #62 on: March 04, 2011, 07:20:52 am »
I don't know when you arrived, but you can file for an extension and then not file your taxes until your 331st day here. That will allow you to utilize the foriegn earned income exclusion. Good luck.


Re: Must pay MAJOR American tax during second year in Korea??
« Reply #63 on: March 04, 2011, 07:33:13 am »
The above posters are right, how I interpreted it on the IRS web site was your 330 days had to mostly be in the given tax year, and there is some room for fudging give or take a month, especially since I am assuming you didn't earn a whole lot during those two months in the states. I think you should be fine filing an extension and then submitting the 2555 form.


  • helloana
  • Veteran

    • 80

    • September 08, 2010, 03:25:00 pm
    • Daegu, South Korea


Re: Must pay MAJOR American tax during second year in Korea??
« Reply #65 on: March 04, 2011, 09:22:53 am »
In my case, I wasn't out of the country for 330 days.  I got hit with $600 in taxes for 2009. Depending on your pay grade, you can invest in an Traditional IRA and receive a refund up to $1,000.  The Feds gave me $400 for my $1,000 contribution.


  • Joss
  • Adventurer

    • 37

    • June 18, 2010, 01:18:08 pm
    • Busan, south korea
Re: Must pay MAJOR American tax during second year in Korea??
« Reply #66 on: March 04, 2011, 10:52:08 am »
Thanks guys. Those are some great ideas. I definitely going to look into it! :)


  • absurdjoy
  • Adventurer

    • 38

    • November 25, 2010, 12:00:14 pm
    • Seoul
Re: Must pay MAJOR American tax during second year in Korea??
« Reply #67 on: March 04, 2011, 12:55:47 pm »
This may come a bit late but I actually emailed the IRS about this very same problem. I have not yet been in the country a full 330 days but will be by August of 2011. As a result I will have to file the foreign exclusion form for two separate tax years.

For this year I filed an extension. In the email reply, I was told that the 12 month period only has to be consecutive and not all within one tax year.

Hope it all gets sorted out.


  • bgore88
  • Newgookin

    • 4

    • October 18, 2010, 08:41:51 pm
    • Incheon
Re: Questions and Answers for American Taxes
« Reply #68 on: March 08, 2011, 02:00:56 pm »
I just sent the 8802 to the IRS.  It wont get back to Korea until after I am gone.  My co teacher said he can handle it.  Will they with hold all of my reimbursements(flight, pension, severance) if that form isnt filed before I leave?  If so will they refund my money once the form is finally filed?


  • Ley_Druid
  • The Legend

    • 2468

    • February 17, 2011, 08:36:33 am
    • Shinan-Gun, Jeollanam-Do, South Korea
Re: Questions and Answers for American Taxes
« Reply #69 on: March 09, 2011, 12:48:30 pm »
Email the IRS at the Beijing office. I did that yesterday and got a quick response. They were very clear and kind with their answer. You can call them too, but I find email is more clear because they usually read it once before sending it instead of all the verbal corrections.

I'm glad that I did!


  • Pearl4885
  • Adventurer

    • 25

    • November 02, 2010, 01:05:30 pm
    • Seoul, South Korea
Re: Questions and Answers for American Taxes
« Reply #70 on: March 09, 2011, 02:10:46 pm »
I was worried about taxes in January (this is my first year), and my accountant told me she would look into my situation. She came back to me and said because I am a US citizen I don't have to pay any taxes for the first two years out here. She made a copy of my passport and alien resident card, and said that was all she needed. I even asked her again later and she said she needed nothing more. Anyway, I'm reading all this about form 8802 on here, and I'm wondering if I should go ahead and get it anyway just to be safe, or if I'm in the clear? It seems like a pain to fill out here not to mention I would love to save the money. ha. I think if Korean taxes are pretty much 'done' until next year, then it would be pointless to pay for the certificate. Anyone been here for a while and have some advice?


2 years tax free.....then what?
« Reply #71 on: March 15, 2011, 01:29:06 pm »
I have just started my third year in Korea. I was residing in the U.K before coming here and hold an Irish passport. So... for the first two years here I was exempt from paying tax. My new school tells me that I now need to start paying tax becuase I have been here more than two years. I dont have a problem with this, and thought it was a bonus to not have to pay for the first two years.

My question is, what does this mean financially? Anyone in or recently been in the same boat. Do I pay one big tax bill or is it deducted from my salary each month, if so the latter, how much will be deducted?




  • Ectofuego
  • Featured Contributor

    • 920

    • November 02, 2010, 09:21:10 am
    • Mars
Re: 2 years tax free.....then what?
« Reply #72 on: March 15, 2011, 01:30:52 pm »
I was in private school last year, making more then public school wages and I only paid 45,000 a year.

If you have been here for a while you grandfather in to the old system too so only a small amount.  if your new, i heard the tax system changed and you pay considerably more, like 1 to 200,000
I'm Jason and I approve this message!


Re: 2 years tax free.....then what?
« Reply #73 on: March 15, 2011, 01:34:17 pm »
i would recommend having your school take a percentage out of every pay cheque.  it's much better than getting a grand sum deducted at the end.


Re: 2 years tax free.....then what?
« Reply #74 on: March 15, 2011, 01:35:25 pm »
Ecto, 45,000 a year or a month?


  • kate.d
  • Veteran

    • 84

    • May 10, 2010, 07:57:50 am
    • South Korea
Re: 2 years tax free.....then what?
« Reply #75 on: March 15, 2011, 01:36:18 pm »
last year i paid about 50,000 every month.  not a big deal.


Re: 2 years tax free.....then what?
« Reply #76 on: March 15, 2011, 01:41:09 pm »
You pay a prepaid amount that is calculated from your monthly salary.  Then at the year end, when it is possible to calculate actual income for the tax year, you either are liable or entitled to tax payment.

The tax rate is 15% of your total ADJUSTED income, not your total net income.



Re: 2 years tax free.....then what?
« Reply #77 on: March 15, 2011, 01:48:32 pm »
Very conflicting stuff. Thanks to all who replied but im no further on really. one person says 50,000 a month, no big deal. quite right, id be happy to pay that. yet im also being told 15% of my adjusted salary. well i take home around 2.1 million so 15% of that is 315,000 a month which certainly is a big deal.


  • thektulu7
  • Adventurer

    • 66

    • March 01, 2011, 10:39:02 pm
    • Gwangcheon, South Korea
Re: 2 years tax free.....then what?
« Reply #78 on: March 15, 2011, 01:59:39 pm »
Very conflicting stuff. Thanks to all who replied but im no further on really. one person says 50,000 a month, no big deal. quite right, id be happy to pay that. yet im also being told 15% of my adjusted salary. well i take home around 2.1 million so 15% of that is 315,000 a month which certainly is a big deal.

Yes, I've heard that typical tax rates are between 2 and 4%...


Re: 2 years tax free.....then what?
« Reply #79 on: March 15, 2011, 02:06:41 pm »
Very conflicting stuff. Thanks to all who replied but im no further on really. one person says 50,000 a month, no big deal. quite right, id be happy to pay that. yet im also being told 15% of my adjusted salary. well i take home around 2.1 million so 15% of that is 315,000 a month which certainly is a big deal.

15% of your adjusted income, not total income.  In appearance it seems to be about 4% but that isn't the case.

I know what I am talking about, I have a degree in taxation, and am working toward my MA