One of the drawbacks of being an American expat is a very stupid law that dictates how much time a citizen can spend at home. If I want to have tax-exempt status on my foreign income, I have to establish that I am not a resident of the U.S. According to the United States government, I can only be considered a non-resident if I am outside the U.S. for 330 days or more per year. This gives us only 34 days to spend in our home country.
It goes something like this: Even though I have a home and job in Korea, if I go back to the U.S. for 35 days, I am then considered a resident of the United States. Thirty-five out of 365 apparently means I’m living there. This is not only a monumental flaw in common sense, it is unique in the world. The U.S. has the most restrictive length of stay of just about any developed nation in the world. I was talking to a friend from the U.K. the other day who told me that he can be in his country for 6 months and still claim South Korean residency.
What surprises me is that I’ll talk to U.S. friends here who have no knowledge of this law. In fact, I’d say the majority of people I talk to are unaware of it. So university teachers and professors who get summers off spend two months or more in the States and don’t give it a second thought.
Many don’t even file taxes, which you’re still supposed to do every year. You fill out a form (2555-EZ) plus your 1040 and send it off. The 2555 form has two “tests.” The one involving the 330 days is called the “physical presence test.” You have to claim you were out of the U.S. for that period of time and then state the dates you were gone. When I bring this up with foreigners, the first question is always “How are they gonna know?” — as in, how will the government catch you if you lie. What I’ve been told is that if you’re audited by the IRS, they can access passport scans.
The reason I’m bringing this up now is that this is the time when people talk about their summer plans. I have a friend’s wedding in late August in Portland that will take up a week of my 34 days. I would love to also visit my sister on the East coast, but there’s simply not enough time. It’s this way every year. It’s also the reason why I spend my winter breaks traveling around Asia or Europe rather than going to the States.
I’m probably being extra paranoid about this stuff, but I look at it this way: One of my original reasons for coming here was the opportunity to save a good chunk of money every year. The amount of money that I manage to save every year is about the same as what I might get taxed in a normal employment situation every year. (Actually, I save more than that, but it’s close.) If I were to cheat, then come back and get audited, I’d have to pay all those back taxes, which would be a lot of money. Collectively, I would owe about the same amount that I’d worked so hard to save. So, as much as I would love to stay in the U.S. for a couple months every summer, it’s not worth the stress. I choose to keep things legit for no other reason than peace of mind.
I should add that I’m no specialist in tax law. This is an extremely convoluted, not to mention totally fucked-up, law. I might have some of the details wrong. But I have had many, many conversations about this. Everytime someone reacts with disbelief and anger I say “Hey, go look it up yourself. If you can find anywhere that I’m wrong I’d like to be the first to know.” But that’s never happened. (You can read about it yourself here.)
So I’ll enjoy my 34 days (actually this year it’s 32), eat a lot of good California Mexican food, see friends and family, and then come back to my home, my real home, in South Korea.