US Taxes (as of 2026; subject to change)

US taxation has one fundamentally distinguishing feature: citizens and permanent residents owe US tax on worldwide income wherever they live (citizenship-based taxation). Even living in Korea and earning nothing in the US, you still have an annual filing obligation. Only the US and Eritrea use this system.

The big picture

| Tax type | Levied by | Filing form | | --- | --- | --- | | Federal income tax | IRS | Form 1040 | | State income tax | States (9 states have none) | State form | | Local income tax | Some cities (NYC, Philadelphia, etc.) | City form | | FICA payroll | Federal | Auto-deducted (Social Security 6.2% + Medicare 1.45%) | | Sales tax | State and city | Charged at purchase | | Property tax | City/county | Annual bill |

Filing schedule (as of 2026; subject to change)

• April 15: federal and most state filing deadline.
• 6-month automatic extension via Form 4868 — but payment is still due April 15 to avoid penalties.
• Filers living abroad get an automatic June 15 deadline, with extension to October 15.

Tax rates (2026 federal, single filer; small annual adjustments)

| Taxable income | Marginal rate | | --- | --- | | Up to USD 11,600 | 10% | | Up to USD 47,150 | 12% | | Up to USD 100,525 | 22% | | Up to USD 191,950 | 24% | | Up to USD 243,725 | 32% | | Up to USD 609,350 | 35% | | Above | 37% |

(Brackets adjust each year for inflation. Joint filing brackets are roughly double.)

Standard vs. itemised deduction

• Standard deduction: about USD 15,000 single, USD 30,000 married filing jointly (as of 2026; subject to change).
• For most Korean immigrants, the standard deduction is enough.
• Itemising helps when mortgage interest, state/property tax (SALT cap USD 10,000), and donations are large.

Worldwide reporting for citizens and green-card holders

Form 1040: report worldwide income

• Korean and other foreign income must also be reported on Form 1040.
• Tax paid to Korea offsets US tax via the Foreign Tax Credit (FTC, Form 1116) to avoid double taxation.
• Or, the Foreign Earned Income Exclusion (FEIE, Form 2555) can exclude up to about USD 130,000 in 2026 (subject to change), if you meet residence tests.

FBAR (Form 114) — foreign financial account reporting

• Required if your aggregate foreign account balances exceed USD 10,000 at any point in the year.
• Filed separately with FinCEN (April 15, automatic October 15 extension).
• Penalties are huge: USD 10,000+ for non-wilful violations; USD 100,000 or 50% of balance for wilful.
• Korean bank, brokerage, and pension accounts are all in scope.

FATCA (Form 8938)

• Filed with Form 1040 if foreign financial assets exceed thresholds.
• Single in the US: USD 50,000 at year-end or USD 75,000 at any point.
• Living abroad: thresholds about 4× higher.

Common pitfalls for Koreans

• Korean stocks and funds (PFIC): holding Korean mutual funds triggers very unfavourable PFIC rules and Form 8621 each year. Better to consolidate into US ETFs where possible.
• Selling Korean real estate: US reporting is required. Korean capital-gains tax counts toward the FTC.
• Korean Cheongyak savings, pension savings (yeon-geum jeo-chuk): subject to FBAR/8938. Tax-free treatment depends on the US–Korea treaty.
• Expatriation tax: giving up citizenship or long-term green-card status can trigger tax on unrealised gains for high-asset filers (Form 8854).
• Child born in the US, raised in Korea: the child is a US citizen and has lifetime US filing obligations. After age 18 they file themselves. Years of non-filing can become serious problems.

State taxes

• No state income tax states: Texas, Florida, Washington, Nevada, Wyoming, Alaska, South Dakota, Tennessee, New Hampshire (excluding interest/dividends).
• California, New York, and Oregon are at the high end (CA top rate around 13%).
• Some cities add their own — NYC about 3.8%, Philadelphia about 3.75%.

US–Korea tax treaty highlights

• Tie-breaker rules for dual residency.
• Limited-period exemptions for students, professors, and researchers.
• Social Security pensions taxed in country of residence.
• Korean tax paid is creditable in the US via FTC.

For complex cases, it's strongly recommended to work with a CPA or Enrolled Agent (EA) who handles both US and Korean tax.

Useful links

• irs.gov — IRS official
• irs.gov/forms-pubs/about-form-1040
• fincen.gov — FBAR filing
• irs.gov/businesses/international-taxpayers — international tax