Understanding Dual Contributions: Korean National Pension vs. U.S. FICA

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Understanding Dual Contributions: Korean National Pension vs. U.S. FICA Navigating social security systems across borders can be confusing—especially for employees working between Korea and the U.S. A recurring question is: Can someone pay into both Korea’s National Pension and U.S. FICA (Social Security and Medicare taxes) at the same time—and what happens if they do? This post breaks down how the Korea–U.S. Totalization Agreement works, what “coverage” means, and the consequences of dual contributions. 1. The Totalization Agreement at a Glance πŸ‡°πŸ‡·πŸ‡ΊπŸ‡Έ Since 2001, the Korea–U.S. Totalization Agreement has coordinated social security coverage between the two countries. Its primary goal is to: Prevent double taxation of social security contributions on the same income during the same time period Protect future benefit rights for cross-border workers Key principles: At any given time, only one country’s social security system applies to your wages C...
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πŸ“† Day 18: What Is Bonus Depreciation? (Explained Simply)

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 πŸ“† Day 18: What Is Bonus Depreciation? (Explained Simply)

If you've ever bought equipment, furniture, or even a vehicle for your business, you might’ve heard the term bonus depreciation. It sounds fancy, but it’s really just a way to get a bigger tax break—faster.

Let’s break it down.

πŸ’‘ What Is Bonus Depreciation?

Bonus depreciation is a tax incentive that lets you deduct a large portion of an asset’s cost in the year you buy it, instead of spreading the deduction out over several years.

Think of it like this:

  • Traditional depreciation: You buy a $10,000 machine and deduct $2,000 per year for 5 years.
  • Bonus depreciation: You deduct $6,000 or more in the first year (depending on the current rate), and the rest later.

This helps lower your taxable income right away, freeing up cash for other business needs.

πŸ› ️ What Kinds of Things Qualify?

Bonus depreciation applies to new or used business assets, as long as they meet IRS criteria. Examples include:

  • Office furniture (desks, filing cabinets)
  • Equipment and machinery
  • Computers and software
  • Vehicles (with some weight restrictions)
  • Qualified improvement property (like upgrades to non-residential buildings)

πŸ“‰ How Much Can You Deduct?

The percentage you can deduct depends on the year the asset was placed in service:

So in 2025, if you buy a $10,000 qualifying asset, you can deduct $4,000 right away.


🧾 How Do You Claim It?

You’ll use IRS Form 4562 to report bonus depreciation. It’s often automatic, but you can opt out if you prefer to spread deductions over time.

🧠 Why Does It Matter?

Bonus depreciation is designed to encourage business investment. It’s especially helpful if:

  • You had a profitable year and want to reduce your tax bill
  • You’re growing and need to reinvest quickly
  • You want to match deductions with cash flow needs

✍️ Final Thoughts

Bonus depreciation is like a fast-forward button for your tax deductions. It’s not always the right move for every business, but when used strategically, it can be a powerful tool.

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