By American In Korea
This is the RIGHT way to do your taxes and pay nothing to the IRS.
This guide is for all unmarried Americans working abroad for less than ~$95,100 / year. If you’re making more than that, chances are you’re financially literate enough to not need me.
Everyone else (Including 100% of English teachers)
You have two options:
The Old, Way: Download form 1040 and 2555EZ, fill them out on your computer and finish by hand, then send them to:
Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0215
USA
Free, Super Fast Way: Use the IRS’s Freefile program, fill them and file them online.
Every other online option is useless, including Turbotax. (There are a dozen other options that don’t apply to you so I won’t get into it).
Let’s Begin
These steps can be followed by anyone not using Freefile as well.
Create an account at Freefile the IRS tax-filing program to file online for free.
1.Select Form 1040. Not 1040A, not 1040EZ. Fill out what you can, leave most of it blank.
Common Problem: Foreign Address- If you get a “zip code” error when you try to e-file, you may need to use a US address. This worked for me right away.
Line 6a: If you claim yourself as a dependent, put 5950 in Line 40. Your form will be rejected if you do not do this. I did not claim myself as a dependent because I’m 100% tax exempt, so I left both blank.
Line 21: Write “ 2555-EZ ” on the left box, and your 2012 income on the right box, in USD. My first year, under the 2 million KRW pay level, the # was 21985. Calculation was ~$1,650 USD/month times 13 months (remember we get paid 13 months per year of work). If you are not using Freefile, put the # in parentheses. If using Freefile, it will not let you do so.
Click “Do The Math” at the bottom, save your work.
2. Add Form 2555EZ-T. Most of it will be auto completed by Freefile when you finish 1040. Fill out the rest, here is a sample.
If you’ve been abroad since January 1st check Bona Fide Resident.
If you left the US before April, use the Physical Presence Test.
If you left the US after April, apply for an extension until you have lived outside the US for 330 days.
Line 2B- Do not put a date in the future, or your form will be rejected. If you haven’t lived abroad for 330 days yet, either file later or file for an extension using Form 4868 also available on Freefile. Just click the Add Form button.
Important: 2555EZ can only be used with 1040. It can’t be used with 1040A or 1040EZ.
3. Click the e-file button in the top right, follow the instructions.
Since this was my first time filing taxes, I just put 0 for Previous year’s AGI, as I was claimed as a dependent.
Not that hard, is it?
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