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  • benteacher
  • Adventurer

    • 48

    • March 31, 2015, 11:25:21 am
    • South Korea
Taxes... How do they work?
« on: January 27, 2016, 08:53:11 am »
I confess to being ignorant about whether or not I've been paying taxes each month. My coteacher mentioned something about a refund to me yesterday. How do taxes work here? My year here is finished in March, so I just want to be clear. Will I be owing money, or anything like that?

Also, taxes in America. Since as a contract worker that was here for over 330 days and made substantially less than $99,000, will I end up owing anything this tax season?

Thanks for your help


Re: Taxes... How do they work?
« Reply #1 on: January 27, 2016, 09:37:36 am »
No, you will not owe anything to the US. :) You still have to file your taxes, though. Also, as an overseas resident, your tax return due date is automatically extended for two months, so instead of April 15, you just need to file by June 15. (If you did happen to make more than $99,000 or whatever the amount is, you would file by June 15, but any taxes owed would have to be paid by April 15, but this is irrelevant to us.) From what I remember, I think you need to include a signed letter explaining why you are using the extension if you do end up filing after the April due date.

As for your Korean taxes, check your monthly paycheck for 소득세 (income tax) and 주민세 (residence tax). I pay about 52K and 5K respectively. (While you're at it, check for 국민연금 too. This is not a tax, but you are entitled to pension benefits, so make sure you and your school are both paying into it.)

Other than that, have your admin go to the hometax website or whatever (edit: the website that #basedcowboyshirt posted) and pull up a PDF of your bank card / cash spendings to use as a deductable. If you receive housing stipend and you pay a monthly rent, get a record of your payments to use as a housing deductable. Someone on another thread said that foreigners are apparently not eligible for the housing deductable, but I got 400K taken off of my taxes for claiming my rent, so find out if you can, too (if you pay rent, that is).
« Last Edit: January 27, 2016, 09:40:18 am by yirgacheffe »


  • kptko
  • Adventurer

    • 46

    • July 22, 2015, 08:26:15 am
    • Seoul
Re: Taxes... How do they work?
« Reply #2 on: January 27, 2016, 10:00:50 am »
You may owe US taxes for work you did prior to your coming here for last year. The work you did in Korea, assuming you pass the physical presence test, will most likely not be taxed by the US.

As a salary employee, you need to file the year end settlement in Korea. If you paid too little Korean taxes, you will owe, and if you overpaid you will get a refund.

Don't forget, if applicable, you will need to file a state tax return.


  • Mezoti97
  • The Legend

    • 2697

    • April 14, 2011, 03:02:50 pm
    • South Korea
Re: Taxes... How do they work?
« Reply #3 on: January 27, 2016, 10:26:12 am »
If you receive housing stipend and you pay a monthly rent, get a record of your payments to use as a housing deductable. Someone on another thread said that foreigners are apparently not eligible for the housing deductable, but I got 400K taken off of my taxes for claiming my rent, so find out if you can, too (if you pay rent, that is).

That is what my employer told me, and she said that she had the accounting department call the tax office to confirm this, which they did. So I don't know what else I can do about it.


Re: Taxes... How do they work?
« Reply #4 on: January 27, 2016, 10:30:46 am »
You may owe US taxes for work you did prior to your coming here for last year. The work you did in Korea, assuming you pass the physical presence test, will most likely not be taxed by the US.

As a salary employee, you need to file the year end settlement in Korea. If you paid too little Korean taxes, you will owe, and if you overpaid you will get a refund.

Don't forget, if applicable, you will need to file a state tax return.

Yes, I should have specified that you will not owe anything to the US on income you earned in Korea. However, even if you do owe taxes on income you earned in the US in January and February of 2015, I doubt it would be that much, so don't worry too much about it. (Just don't forget to file!) I personally didn't owe anything. I think I got back something like $30. :laugh:

Also, I meant to mention this earlier... I've heard that California is a bit of a pain when it comes to state taxes even if you are living overseas. Something about claiming residence. I'm not 100% sure, but apparently California residents may owe state tax (not federal), so if you're from California... find out about that. :P


Re: Taxes... How do they work?
« Reply #5 on: January 27, 2016, 10:35:12 am »
If you receive housing stipend and you pay a monthly rent, get a record of your payments to use as a housing deductable. Someone on another thread said that foreigners are apparently not eligible for the housing deductable, but I got 400K taken off of my taxes for claiming my rent, so find out if you can, too (if you pay rent, that is).

That is what my employer told me, and she said that she had the accounting department call the tax office to confirm this, which they did. So I don't know what else I can do about it.

 :lipsrsealed: I wish I could help. I feel like it might be a mistake on their end, because several other posters have said that they claimed their rent, myself included. I'm definitely not saying I don't believe you; I hope I didn't come off that way. I just find that I don't trust the admin to do their work properly (last year, at my previous school, I had to pay back a couple hundred thousand because of a miscalculation on their end, which doesn't seem like much, but it was annoying) so I almost feel like your accounting department is not doing their job properly. (To be clear, I don't mean to imply that they are deliberately trying to hurt you.)

Also, last year, the school didn't take out the taxes from my monthly pay, so I ended up owing almost 900K, but that was my fault, too. I was too stupid to realise they weren't deducting the taxes; I confused the pension for taxes so I was really shocked when I found out I owed that much, especially considering I'm not a light spender :laugh: Either way, I was really annoyed that they didn't just deduct my taxes monthly.

Maybe you can ask some foreigners in your area? If you know anyone personally that receives the housing stipend, ask them how their school handles that.
« Last Edit: January 27, 2016, 10:51:52 am by yirgacheffe »


  • Mezoti97
  • The Legend

    • 2697

    • April 14, 2011, 03:02:50 pm
    • South Korea
Re: Taxes... How do they work?
« Reply #6 on: January 27, 2016, 11:57:24 am »
:lipsrsealed: I wish I could help. I feel like it might be a mistake on their end, because several other posters have said that they claimed their rent, myself included. I'm definitely not saying I don't believe you; I hope I didn't come off that way. I just find that I don't trust the admin to do their work properly (last year, at my previous school, I had to pay back a couple hundred thousand because of a miscalculation on their end, which doesn't seem like much, but it was annoying) so I almost feel like your accounting department is not doing their job properly. (To be clear, I don't mean to imply that they are deliberately trying to hurt you.)

Also, last year, the school didn't take out the taxes from my monthly pay, so I ended up owing almost 900K, but that was my fault, too. I was too stupid to realise they weren't deducting the taxes; I confused the pension for taxes so I was really shocked when I found out I owed that much, especially considering I'm not a light spender :laugh: Either way, I was really annoyed that they didn't just deduct my taxes monthly.

Maybe you can ask some foreigners in your area? If you know anyone personally that receives the housing stipend, ask them how their school handles that.

Yes, I understood what you meant the first time, so no worries about that. I guess I just feel like I can't be bothered to argue with my employer about it now, unfortunately, because I was told that Korean taxes are due at the end of this month (so I guess at the end of this week), and so I was just anxious to get my Korean taxes done and out of the way, since I am leaving to go on vacation soon and it would be too late to take care of the Korean taxes after I come back, so I was just eager to get it finished/taken care of this week, i.e. before Friday, which I did (finished and submitted my tax forms/documents yesterday).

I guess I could try asking one of my co-workers, although I'm not expecting I'll find out much from him as he doesn't seem to know much about stuff like this in general, but I guess the worst he'll say is he doesn't know, either. It wouldn't really be helpful for me to ask anyone (other foreigners) in my area outside of my workplace because I don't know any foreigners outside of my workplace who work in my area and I don't really talk to many foreigners in Korea, in general, so...I wouldn't really have anyone else to ask about this, unfortunately.
« Last Edit: January 27, 2016, 12:27:50 pm by Mezoti97 »


  • benteacher
  • Adventurer

    • 48

    • March 31, 2015, 11:25:21 am
    • South Korea
Re: Taxes... How do they work?
« Reply #7 on: January 27, 2016, 11:59:41 am »
Thanks for the replies everyone, especillay yirgacheffe, you're very helpful and friendly :)

So assuming that I have been paying taxes every paycheck, which I believe I have, I'll double check my stubs this evening, what action needs to be taken by myself? Does the school file, or do I have to send in a form like back home?


  • Mezoti97
  • The Legend

    • 2697

    • April 14, 2011, 03:02:50 pm
    • South Korea
Re: Taxes... How do they work?
« Reply #8 on: January 27, 2016, 12:29:38 pm »
So assuming that I have been paying taxes every paycheck, which I believe I have, I'll double check my stubs this evening, what action needs to be taken by myself? Does the school file, or do I have to send in a form like back home?

Do you work at a public school? If so, then your school will file your taxes for you. However, if you want to get any possible deductions off your taxes, you should log-in to the Korean tax web site, print out your spending records, and give that to your school so that they can include those with your Korean tax return when they submit it to the Korean tax office on your behalf.


  • benteacher
  • Adventurer

    • 48

    • March 31, 2015, 11:25:21 am
    • South Korea
Re: Taxes... How do they work?
« Reply #9 on: January 27, 2016, 12:31:50 pm »
Thanks Mezoti97. I do work at a public school. Do expenditures amount to a sizeable deduction?

And if for some reason I wasn't paying taxes each month, will a lump sum be taken out of the February paycheck?


  • Mezoti97
  • The Legend

    • 2697

    • April 14, 2011, 03:02:50 pm
    • South Korea
Re: Taxes... How do they work?
« Reply #10 on: January 27, 2016, 12:47:21 pm »
Thanks Mezoti97. I do work at a public school. Do expenditures amount to a sizeable deduction?

And if for some reason I wasn't paying taxes each month, will a lump sum be taken out of the February paycheck?

It depends on how much you've spent on purchases paid with your debit/credit card (or cash, if you have that "현금영수증" card that you give the cashier when you pay for something in cash to have that purchase recorded on the tax web site like with your debit/credit card purchases in Korea) and some other factors (e.g., if you went to a clinic/hospital to see a doctor, if you donated any money to charity, etc.). I only started submitting printouts of my spending records from the Korean tax web site last year, and I ended up owing money to the tax office, whereas before last year, I never submitted printouts of my spending records (I didn't really use a debit card before, so I didn't really have any spending records to print out) and I usually got some tax refund. I was told last year that the Korean government raised the taxes last year, which was probably why I ended up owing money instead of getting a refund. Still, I wasn't thrilled about it.

As for the situation where if your school hasn't been taking taxes out of your paycheck on a monthly basis, I have never been in that situation before so I can't comment from personal experience, but I've heard before that yes, the school will just take out a lump sum (not sure when/what paycheck month, though).


Re: Taxes... How do they work?
« Reply #11 on: January 27, 2016, 12:55:56 pm »
If you end up owing money to the Korean government, I think you can discuss beforehand with your admin about how you will pay it. Like I said earlier, I didn't have any taxes taken out of my paychecks at my previous school, so I ended up owing almost 900,000 won. I also didn't renew with them, so I got my severance pay, and the admin lady ended up just taking it out of that instead of my February paycheck. She told me beforehand that she would do it like that, so talk to whoever pays you to sort it all out.

Mezoti97, yeah I was told last year that the taxes were raised, too, which was probably a contributing factor for why I owed so much. :cry:


  • taeyang
  • Moderator - LVL 4

    • 5521

    • September 08, 2010, 08:35:10 am
    • daejeon
Re: Taxes... How do they work?
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