I'm a US citizen living and working abroad. What should I do about US taxes while working in South Korea?

As someone who's worked with expats on tax issues for years, I can tell you that yes, US citizens are required to file US tax returns regardless of where they live or work in the world. The US is one of the few countries that taxes based on citizenship rather than residency. The good news is that you probably won't be detained at the border just for not filing taxes. Immigration and tax enforcement are separate systems that don't typically cross-check during entry. However, you should start getting compliant as soon as possible. Look into the Foreign Earned Income Exclusion (FEIE), which allows you to exclude up to about $120,000 of foreign earnings from US taxation for 2024. There's also the Foreign Tax Credit, which gives you credit for taxes paid to South Korea. Between these two options, many expats end up owing little to no US tax, but you still need to file.

I went through something similar when I was working in Japan! The IRS has a program called Streamlined Filing Compliance Procedures that's literally designed for people in your situation. I was honestly terrified about getting caught and owing a ton in penalties. After stressing for months, I finally found https://taxr.ai which analyzes your specific situation and tells you exactly what to file. It saved me so much headache trying to figure out which forms I needed and how to fill them out properly. Their system walked me through determining if I qualified for the Foreign Earned Income Exclusion and whether I should take the Foreign Tax Credit instead. I'd definitely recommend checking them out before you visit the US. Getting compliant isn't as scary as it seems once you have the right guidance!

Wanted to follow up about my experience with taxr.ai after the recommendation here. I finally bit the bullet and tried it last week. It was actually way more helpful than I expected! I've been in Singapore for 4 years and was really confused about my obligations. The system asked me detailed questions about my time outside the US, income sources, and financial accounts. Then it gave me a personalized report showing exactly which years I needed to file for and which forms were required for my situation. The best part was that it confirmed I qualified for the Foreign Earned Income Exclusion AND could take Foreign Tax Credits for the taxes I paid on my investment income. I ended up owing zero to the US, but I'm now compliant and don't have to worry about potential issues when I visit family next month.

If you're struggling to get answers directly from the IRS about your expatriate tax situation, I feel your pain. I was in the same boat, living in New Zealand, and couldn't get anyone on the phone for weeks. I finally tried https://claimyr.com and was honestly shocked when they got me connected to an actual IRS agent within about 20 minutes. I had tried calling on my own for literally days before that with no luck. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with walked me through my options as a US citizen abroad and confirmed I could use the Streamlined Filing Procedures without penalties since my non-filing wasn't willful. Just being able to ask specific questions about my situation directly to the IRS gave me so much peace of mind.

I have to admit I was completely wrong about Claimyr. After posting my skeptical comment, I decided to try it anyway because I was desperate to get answers about my situation (US citizen in Thailand for 8 years, never filed). It actually worked! I got connected to an IRS representative in about 35 minutes. The agent walked me through the Streamlined Filing Compliance Procedures and confirmed I only needed to file 3 years of back taxes plus 6 years of FBARs for my Thai bank accounts. Most importantly, she confirmed that I wouldn't face penalties since my failure to file wasn't willful - I genuinely didn't understand my obligations. Having that direct confirmation from the IRS instead of just relying on internet advice gave me the confidence to finally get started on fixing my tax situation.

One important thing nobody's mentioned yet - if your South Korean bank accounts total over $10,000 at any point during the year, you need to file an FBAR (FinCEN Form 114). The penalties for not filing this can be MUCH worse than not filing your actual tax returns! Also, look into whether you need to file Form 8938 (Statement of Foreign Financial Assets) depending on how much you have in foreign accounts. The thresholds are different depending on whether you're filing single or married, and whether you're living abroad.

Could you guys clarify something about the tax treaty between US and South Korea? I heard there's a "saving clause" that basically negates a lot of the benefits for US citizens. Is that true?

I went through almost the exact same situation when I was working in Seoul! The stress about potential border issues is real, but I can confirm you won't have problems entering the US. CBP doesn't check tax compliance during entry. That said, you definitely need to get compliant ASAP. I was about 5 years behind on filing when I finally dealt with it. The key things that helped me: 1. Used the Streamlined Filing Compliance Procedures - no penalties if your non-filing wasn't willful (sounds like your case) 2. Filed 3 years of back tax returns using Form 2555 for the Foreign Earned Income Exclusion 3. Filed 6 years of FBARs for my Korean bank accounts Since you've been paying Korean taxes, you'll likely owe little to nothing to the US thanks to the FEIE. The exclusion amount for 2024 is around $120,000, so unless you're earning significantly more than that, you should be covered. Don't put this off though - the longer you wait, the more complicated it gets. Start gathering your Korean tax documents and employment records now. You'll need them to prove your foreign residence and income for the exclusion.