Disclaimer: I do not prepare taxes for a living and I do not have a degree in tax law! The following is a guide on what differences I personally found for filing out my returns here in Korea as a USFK active duty family member. Please use the services at your local legal office and have a professional prepare your taxes for you.
Filing Federal Income Taxes in Korea as Active Duty
If you are one of those brave souls who files their own taxes you may be curious to know what will change when you file in Korea versus the States. I found only a few differences but everyone’s income taxes are unique so be prepared to take your taxes in and get them done right at your local legal office. I went in to the Humphreys office to ask a few questions and they were extremely helpful.
Turbo Tax Freedom Edition
Heh, sounds like freedom fries. Ignoring the name, as of the 2016 Tax year, the Turbo Tax Freedom Edition is a free tax preparation software for active duty military, persons who qualify for the EIC or for those who are making a maximum gross income of $33,000. It takes you step by step through the tax preparation process by asking questions and filling forms out for you based upon your answers. There are other tax preparation software out there but this is what I’ve used for a few years now and it’s good enough.
If you already know how to fill out your taxes, this service will drive you insane because at no time are you allowed to edit forms yourself. If you see the final product and notice a mistake you have to go back through the question and answer process to fix it. If your taxes are fairly simple and you have no rental properties or other odd incomes then Turbo Tax will make preparing your returns by yourself easier.
Where can I file my taxes at Camp Humphreys?
Camp Humphreys Legal Office – As of March, 2017, the legal office is located next door to the Painted Door Thrift Shop, behind the 2-CAB helicopter statue and across the street from the CDC. The tax preparers were very polite and knowledgeable when I asked for help and their services are completely free. If your taxes are simple, walk-ins are fine but they ask for clients to make an appointment for more complicated returns. Their Facebook page has up to date walk-in hours and contact information.
Camp Humphreys’ H&R Block – H&R Block is available at the AFFES express near The Medical Clinic and the WIC Office. When I looked at their map it confused the heck out of me because the brand new hospital and new bus terminal are near each other, too. I added the labels TMC and USO to help anyone else who was confused.
What is my Mailing Address and Physical Address as Military Personnel?
When filling out your taxes, the physical/ residency address will be the military sponsor’s home of record. This is most often the place where they pay state taxes and/or where they entered the military. The legal office can clarify better but your APO mailing address or offpost address is not your physical address. This is extremely important for the Earned Income Credit, if you say that you did not live in the US for most of this year you will see your refund drop like a stone. According to IRS.gov, overseas military personnel are considered to be living in the United States for the purposes of the Earned Income Tax Credit. Why Turbo Tax specifically states that military has to say they lived overseas makes no sense. Their own answers in the Q&A quotes the IRS.
DoD Civilians have more ambiguous wording so go to legal for clarification.
Use your APO for the mailing address, some states still send paper checks.
Do you own or control a foreign bank account, trust or financial asset?
For most USFK personnel this will not be the case but if you are working offbase or have a school banking account for your kids for offpost schools then you may own a foreign bank account. For TurboTax, select yes and answer whether you’ve ever had more than $10,000 in it. If no, then go on your merry way. If you have, you may want to finish your taxes at the legal center to make sure you are reporting your interest properly.
That’s About It
File your taxes normally and remember that for the federal portion, military personnel are considered to be living in the United States as their home of record. Don’t forget that each State has different rules for their returns so what works for one person may not work for another. When in doubt, ask legal.