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Old 02-09-2011, 01:44 PM
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Partial Foreign Earned Income for 2010

Hello,

I lived and worked in South Korea for 2 years. Last year, I claimed the Foreign Earned Income Tax Exclusion but I'm unable to do that again for this year as I was only a resident for 7 months.

How do I file this year with partial foreign earned income, no US income, and no W-2s? Will I have to pay US taxes on that already Korean taxed income and how do I go about it without any documentation?

I'm completely clueless and any help and information you can provide will be most appreciated!



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Old 02-10-2011, 04:51 AM
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“I lived and worked in South Korea for 2 years. Last year, I claimed the Foreign Earned Income Tax Exclusion but I'm unable to do that again for this year as I was only a resident for 7 months. “----> To qualify foreign earned income exclusion, you must either reside in S.Korea for the entire year, 365 days, or be physically present in S.korea for 330 full days during a 12 month period. When you qualify for the exclusion, but resides in S.Korea only part of theyear, your exclusion should be prorated.For example, if you reside in S.korea for the last 210 days of 2009 and the first 300 days of 2010, then you meet the 330 days in a 12 month period requirement. Thus you qualify forth exclusion in each year. However, assuming the max. exclusion in both years is $91,400($91,500 in 2011, I guess), the max. exclusion must be prorated in both years as follows; 2009; 210/365*$91,400=$52,586, 2010; 300/365*$91,400=$75,123.

“How do I file this year with partial foreign earned income, no US income, and no W-2s?”--->As a US citizen or a US resident alien under either US Tax Code or US INS Rules, you are liable for taxes(both federal and state or local taxes(if applicable) on your US source and world wide income. Without W2, you can still file your tax return.
Please visit the IRS website here; U.S. Citizens and Resident Aliens Abroad
“Will I have to pay US taxes on that already Korean taxed income and how do I go about it without any documentation?”---->No. As you paid your income that you earned in S. Korea to Korean taxing authority, you can claim either (both) foreign earned income exclusion or (AND) foreign tax credit on your federal return, but you can’t take exclusion or credit on your state income tax return.If your income in S.Korea is self-employed income, then you may have to pay quarterly estimated taxes to the federal and state governments as long as you expect to owe tax of $1,000 or more when you file your return. You also need to pay self employment tax if the amount on Sch SE line 4 is $400 or exceeds $400. However, You do not have to pay estimated tax for the current year if you meet all three of the following conditions; You had no tax liability for the prior year ; You were a U.S. citizen or resident for the whole year; Your prior tax year covered a 12 month period. US Expats file returns at different addresses. If no payment is due, file by mail or delivery service with IRS, Austin, TX 73301-0215 USA. If a payment is due, file with IRS, P.O. Box 1303, Charlotte, NC 28201-1303, USA. You can also file through the nearest U.S. Embassy or Consulate, but sometimes the personnel there do not know how to do it. you can prepare your own return on a paper forms by mail or electronically file with computer software like H&R Block Tax Cut or TurboTax. In addition, if your total income is less than $58,000, you can file electronically free with the IRS. Paper and electronic forms are available from the above IRS site.
IRS website is here; Free File: Do Your Federal Taxes for Free
Please visit the IRS websites here; Estimated Taxes
Self-Employment Tax (Social Security and Medicare Taxes)
http://www.irs.gov/pub/irs-pdf/f1040sc.pdf
http://www.irs.gov/pub/irs-pdf/f1040sse.pdf



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Old 02-10-2011, 07:18 AM
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Also do not forget this;if you own or have authority over a foreign financial account, including your bank account in S.Korea, you may be required to report the account yearly to the Internal Revenue Service. Under the Bank Secrecy Act, each United States person must file a Report of Foreign Bank and Financial Accounts (FBAR), if the person has a financial interest in, or signature authority (or other authority that is comparable to signature authority) over one or more accounts in a foreign country and
The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.Then you need to file Form TD F 90-22 on or before June 30 of the following year.The FBAR is not to be filed with the filer's Federal income tax return.



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