Report of income tax
If you are a U.S. citizen or permanent resident, you need to file a tax return of your worldwide income
every year to the federal and state government regardless of where you reside.
If you have stayed in the U.S. for more than 183 days in the last three years,
you will be considered a U.S. resident under the tax law and you will need to file a tax return.
The income tax is estimated by applying the sum of all income including gross salary, bank interest, investment income, and various deductions and credits.
Individual Income Tax Return
U.S. tax is levied on federal, state, county, city, but individual tax return is mainly federal and state tax return.
Federal and state tax return use different forms
depending on whether you are Resident or Nonresident, and U.S. citizens or permanent residents residing in Korea will use Form 1040 to file a tax return.
The 1040 Individual Income Tax Return consists of two pages, containing basic information of the taxpayer, dependents, and income-related information on the first page and lists of deductions to which final determined tax is calculated on the second page. You will either pay your taxes or get a refund based on this amount.
If you are a U.S. citizen or permanent resident and if you earn a certain amount of income, you are subject to file a tax return regardless of where you reside or where your income is earned since the worldwide income is subject to U.S. Income Tax.
Filing due date for Federal Income Tax Return is generally on April 15th. If the due date falls on weekend (Saturday or Sunday) or legal holiday, the due date will be delayed until the next business day. The return will be considered filed on time if the postmark date on the envelope is by April 15th. If you are a U.S. citizen or resident alien living outside of the U.S., an automatic 2-month extension may apply when filing your tax return. For those who are subject to file General Income Tax Return, it is difficult to file tax return on time so you can complete the Form 4868 and extend the deadline by October 15th. However, the tax payment date will not be extended even if the tax filing date is extended. The best way to solve this problem is to pay the estimated tax in advance, especially for high-income earners.
You can file U.S. federal tax return to the IRS(Internal Revenue Service), and U.S. state tax return to each state government.
In the case of tax filing, you can file a tax return on your own or through a CPA or EA. However, you may miss out some of the items on your tax return when filing alone which may result in filing an additional amended tax return. We advise you file your tax returns though a professional..
If you have not filed your tax return by the deadline or have not paid the specified tax even if you have filed a tax return, the IRS will impose a penalty based on the delay. In addition, unpaid taxes will incur interest and you will be required to pay the principal and interest for the unpaid tax. The interest rate applicable to the unpaid balance is renewed every three months and compounded daily. If you missed the deadline for filing a tax return, you will be penalized in proportion to the unpaid period, so it is recommended that you file your tax return as soon as possible.
If you are a U.S. citizen or a resident foreigner, you must report income from all sources, both in the U.S. and abroad. The following lists include documents that should be prepared for the tax return.
- General Income Tax Return (only if applicable)
- Earned income tax / Other income tax
- Withholding tax of each account
- Stock trading income
Frequently asked questions
- If you have resided less than 183 days for the tax year
- If you are filing a tax return on your own country
- If you have a closer connection to your country than the U.S.
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