Read 2687 times

  • benztof
  • Newgookin

    • 3

    • October 03, 2010, 11:31:01 pm
    • Suncheon, South Korea
US Taxes
« on: April 20, 2014, 03:15:29 pm »
Hello.  This is my 3rd year teaching in Korea and i have a few US tax questions.. Ive heard we are exempt from paying taxes if we have made under 93,000 dollars.  I emailed this information to my father:

Do I have to pay US taxes?

Unlikely. If your contract is one year, you become a "bona fide resident" of Korea the day your contract commences and hence qualify for the exclusion. However, there is one exception to this rule: if you make more than $92,900 USD (2011 figure), but since EFL teachers in Korea typically don't make that much, you probably don't have to worry. Also, if your contract is less than a year (e.g., six months), then you don't qualify for avoiding US taxes. However, you can still apply for Korean tax exemption.

Is the foreign income tax exclusion automatic? Do I still have to file my tax return with the IRS every year in Korea?,

The exclusion is not automatic as you must submit form 2555 along with form 1004 (NOT 1004A or 1004EZ).  You can request your school to give you a document showing your yearly earnings around tax time (late Jan.) as the IRS may require proof of foreign income.   Say/write to your school's administration office


And he responded with this:

We will have problems with your tax return. Form 2555 Foreign Earned Income exclusion has prerequisites in order to be eligible. One is the Bona Fide Residency Test.  Must have been a resident of Korea for the entire 2013 year. NOT YOU.
Second, Physical Presence Test. Must have been a resident of Korea for 330 full days starting in 2013.  You've been in Korea since Sept 2013 until now. Not 330 days. Not even close.
   The other years we filed we did not file 2555. Probably not eligible. Your income in Korea is subject to the same U.S. tax laws that apply to citizens living in the U.S.  Prior years U.S. income tax returns are probably incorrect


Any thoughts?


  • LindseyN
  • Adventurer

    • 40

    • October 23, 2011, 09:42:40 am
    • Seongnam, South Korea
Re: US Taxes
« Reply #1 on: April 20, 2014, 03:28:58 pm »
You need to apply for an extension to reach the number of days needed to qualify for the physical presence test. My first year in Korea, I applied for an extension of deadline until October 15th to reach my 330 days. It was granted to me without a problem. The 12 month period for the physical presence test can start whenever you need it to as long as the months are consecutive. You can request the deadline delay and use the year from September 2013 to September 2014, but you must request the additional time and explain why you need those extra months. As someone living outside the states, you have an automatic extension to June, but a longer one must be requested.

As a citizen, you are required to file taxes every year and report your income, no matter where you earned it. You must also qualify for the foreign income exclusion every year. It would be a whole lot easier if it rolled over from year to year, but we have to do the paperwork each year.


  • oskinny1
  • Expert Waygook

    • 662

    • November 01, 2010, 10:31:37 am
    • Busan
Re: US Taxes
« Reply #2 on: April 20, 2014, 04:49:01 pm »
Could you explain how this is your 3rd year in Korea but you did not get to Korea until Sept 2013?

Did you finish your old contract and go home for a bit? Did you work while you went home?The 330 day thing is really just for the 1st year. After that you are ok to go home for longer periods.

If you just went home for a few weeks this past summer then you are still ok because you qualified from the 2012 tax year.

The easiest thing for you to do is file on turbotax or something similar and efile. It will take an hour tops and then you're done. I do this every year with no problems.


  • Mezoti97
  • The Legend

    • 2702

    • April 14, 2011, 03:02:50 pm
    • South Korea
Re: US Taxes
« Reply #3 on: April 21, 2014, 07:24:22 am »
The exclusion is not automatic as you must submit form 2555 along with form 1004 (NOT 1004A or 1004EZ).

Just FYI, the form is 1040, not 1004.


  • GiftofGab
  • Waygookin

    • 13

    • July 20, 2010, 01:25:15 pm
    • Busan, South Korea
Re: US Taxes
« Reply #4 on: April 21, 2014, 12:13:33 pm »
Hey, I've been in Korea for 4 years now and just cleared up 4 years of not filing...

I wanted to make sure that everything was ok before moving back and avoid any potential audits... so I went through a CPA in the states to get it done.  I recomend this route if you're a stickler about having it done right.  Beware and do your research.  When searching for a reliable CPA, rely more on recomendations than you usually would.  Cheaper, faster, and easier does not always mean the best when it comes to your financial security. 

So try to avoid the larger companies for someone out on their own or with a partner and with a long running/successful office.  Also if you end up giving a power of attourney to them to sort out your taxes, make sure it's limited to only your issues.  Some even go as far as doing a background check on their CPA so that's why recomendations are very important. Trust.   

As a Us citizen we're one of two countries that require individuals to still file while abroad.  However annoying it can be it's fortunate that our foreign income is excluded for anything under 92,000 leaving us with no taxable income. 

The penalties for failure to file is percentage based on your taxable income.... which in your case would be zero.  You will need to have some kind of write up of your montly/yearly income for each year to file properly.  Doesn't have to be an officical document but some idea of your income.

If for some reason the IRS catches your scent they'll audit and can possibly freeze your assets for a certain period of time.  Failing to file even though you're not having to pay taxes is still considered tax evasion.  Though don't freak because as long as you get it squared away and take the initiive it will be unlikely that they'll take action.  Being proactive about correcting your taxes is what will keep you out of the fire from what I've read and been told.

I've taken advice from my parents and others on this but you have to look at it like this... You don't opt out for others opinion if you've been hit by a car...you go to the doc.  Same with a CPA, tax laws change all the time and it's infuriating how complicated it can be.  CPA's study and work it every day.  Hope this helped, good luck.


  • Schellib39
  • Expert Waygook

    • 773

    • March 10, 2011, 03:08:04 pm
    • South Korea
Re: US Taxes
« Reply #5 on: April 21, 2014, 01:29:23 pm »
Hey, I've been in Korea for 4 years now and just cleared up 4 years of not filing...

I wanted to make sure that everything was ok before moving back and avoid any potential audits... so I went through a CPA in the states to get it done.  I recomend this route if you're a stickler about having it done right.  Beware and do your research.  When searching for a reliable CPA, rely more on recomendations than you usually would.  Cheaper, faster, and easier does not always mean the best when it comes to your financial security. 


I'm pretty much in the same boat as you and was wondering if you went through a CPA from here in Korea or you went through one during a visit back home? Any infor would be greatly appreciated. I know a couple CPAs that I went to University with, is this something they would be able to do without me being present in the USA?


  • oskinny1
  • Expert Waygook

    • 662

    • November 01, 2010, 10:31:37 am
    • Busan
Re: US Taxes
« Reply #6 on: April 21, 2014, 02:14:29 pm »
Theexclusion is $97,600 for 2013.

You do not need a CPA to do this. Just fill out the 1040 and 2555. That is it. Done.


  • khowes
  • Waygookin

    • 15

    • September 07, 2009, 09:22:02 am
    • Suncheon
Re: US Taxes
« Reply #7 on: April 21, 2014, 03:50:32 pm »
Thanks for all the info.. The reason why I arrived in Sept 2013 and have been teaching here for 3 years is because I took a break between each contract..

GiftofGab- When you filed the back taxes for 4 years were you charged a fee?  What did your taxes amount to? Were there penalties for filing late?

Thanks again for the info.


  • country09
  • Expert Waygook

    • 653

    • January 05, 2011, 10:04:21 am
Re: US Taxes
« Reply #8 on: April 22, 2014, 09:55:39 am »
Hey, I've been in Korea for 4 years now and just cleared up 4 years of not filing...

I wanted to make sure that everything was ok before moving back and avoid any potential audits... so I went through a CPA in the states to get it done.  I recomend this route if you're a stickler about having it done right.  Beware and do your research.  When searching for a reliable CPA, rely more on recomendations than you usually would.  Cheaper, faster, and easier does not always mean the best when it comes to your financial security. 

So try to avoid the larger companies for someone out on their own or with a partner and with a long running/successful office.  Also if you end up giving a power of attourney to them to sort out your taxes, make sure it's limited to only your issues.  Some even go as far as doing a background check on their CPA so that's why recomendations are very important. Trust.   

As a Us citizen we're one of two countries that require individuals to still file while abroad.  However annoying it can be it's fortunate that our foreign income is excluded for anything under 92,000 leaving us with no taxable income. 

The penalties for failure to file is percentage based on your taxable income.... which in your case would be zero.  You will need to have some kind of write up of your montly/yearly income for each year to file properly.  Doesn't have to be an officical document but some idea of your income.

If for some reason the IRS catches your scent they'll audit and can possibly freeze your assets for a certain period of time.  Failing to file even though you're not having to pay taxes is still considered tax evasion.  Though don't freak because as long as you get it squared away and take the initiive it will be unlikely that they'll take action.  Being proactive about correcting your taxes is what will keep you out of the fire from what I've read and been told.

I've taken advice from my parents and others on this but you have to look at it like this... You don't opt out for others opinion if you've been hit by a car...you go to the doc.  Same with a CPA, tax laws change all the time and it's infuriating how complicated it can be.  CPA's study and work it every day.  Hope this helped, good luck.

I am like you. I think I have 3 years though. I filed the first two years I was here then I got lazy. Anyways I am wondering why you went through a CPA. From what I have researched and spoken with the IRS about it seems straightforward to file for multiple years. Did you use a CPA just to make sure there were no issues and didn't want the hassle or was there some other reason?


Re: US Taxes
« Reply #9 on: October 31, 2014, 10:50:46 am »
Try here too.

www.taxpark.net
Here they have reasonable rate than H&R Block.
#402 Woosung Bld, 7-18 Dongbingo-dong, Yongsan, Seoul Korea
Tel +82 2-796-8181 / 02-792-7999

Not sure, how much H&R block charges but in the reference to this review below, they seem to charge $200 for consulting which is way higher than Dr. Park charged.
https://ko.foursquare.com/v/hr-block-yongsangu-seoul-ko/4cfe784647699eb01fb31715