What Happens if a U.S. Expat Files Their Taxes Late?
So, you live abroad. After moving to a foreign country and getting adjusted, you might realize that you’ve neglected your taxes. Or, you didn’t know you still needed to pay them. Knowing what happens if a U.S. expat files their taxes late can help you submit yours on time.
Unfortunately, filing your taxes late will result in fines for U.S. expatriates. In addition to financial penalties, interest will begin to accrue on the taxes you owe once the filing deadline has passed. American expatriates can be fined for filing their taxes late because the United States has a citizen-based taxation system, which requires all citizens to file an annual tax return. Enlisting the guidance of an experienced accountant can help expats file their taxes on time and avoid fines.
The CPAs for American expatriates at US Tax Help can be there to help you file your taxes on time and as you navigate tax season while abroad. Call the CPAs for American expatriates at US Tax Help at (541) 362-9127, or visit us online today to avoid filing your taxes late.
What Happens if U.S. Expats File Their Taxes Late?
When U.S. expats file their taxes late, they will be subject to fines from the IRS like any other American citizen. In the United States, all citizens must file a tax return annually, regardless of where they live. If you fail to file before the deadline, you can incur significant fines. When living abroad, there are several more filing requirements, in addition to the average tax return.
If you file your taxes late as a U.S. expatriate, you can incur significant fines. If you don’t file at all, you can be fined 5% of the sum of what you owe to the IRS. That’s known as the Failure to File Penalty. Say you owe $1,000 at the end of the tax year. In addition to paying $1,000, you will also be fined $50 for every month you fail to file your taxes. This fine will stop once it totals 25% of the sum that you owe. Should you owe a significant amount of money at the end of the tax year, the Failure to File Penalty can become significant.
In addition to the Failure to File Penalty for U.S. expatriates, there is also a Failure to Pay Penalty which begins once the Failure to File Penalty has reached 25% of the owed sum. This penalty fines a U.S. expatriate 0.5% of what they owe to the IRS, up to 25%. Finally, American expatriates need to know that interest begins accruing on money owed once the filing deadline has passed. That means that you will likely end up owing more than you would have if you filed your taxes on time. If U.S. expatriates file their taxes late, they will, unfortunately, become vulnerable to substantial fines and penalties from the IRS.
Why Can a U.S. Expat Be Fined if They File Their Taxes Late?
There are two main taxation systems used across the world: citizen-based and residency-based. When American citizens move overseas, they are still beholden to the United States Tax Code. Because of this, expats must continue to file their tax returns on time. When living abroad, understanding how the rules apply to you can be difficult.
As long as you retain your American citizenship, you must file your taxes with the IRS. That’s because the United States has a citizen-based taxation system. Expatriates may be unaware of this and miss the April 15th filing deadline. Luckily, there is a two-month extension for American expatriates filing their taxes from abroad. U.S. expats have until June 15th to file their annual tax returns with the IRS.
However, failure to file before June 15th makes American expatriates subject to fines from the IRS, just like any other U.S. citizen. When you move abroad, the United States Tax Code applies differently to you. There are new filing requirements you may not be aware of. That’s why it’s important to seek guidance from experienced professionals, like the CPAs for American expatriates at US Tax Help. Even if you file on time as an expatriate, you may fail to include important forms. That can make you susceptible to fines and penalties from the IRS.
How Can U.S. Expats Avoid Late Tax Filing?
Moving abroad can be hectic. Probably the last thing you’re thinking about is how to file your American taxes while living overseas. Enlisting the help of skilled professionals can simplify tax season for U.S. expatriates. As you enter into different financial situations while living abroad, having an experienced accountant by your side can help you properly file your annual tax returns.
When American citizens relocate to a foreign country, they must still file their taxes with the IRS. In addition to completing an annual tax return, expats may also be required to complete several forms. Even if you live abroad, the IRS still likes to keep tabs on American money. Because of that, you may also need to begin submitting additional forms along with your annual tax return. An experienced professional, like the CPAs for American expatriates at US Tax Help, can make the transition process easier. As you accumulate wealth in foreign accounts, you may have to report it to the IRS. Being unaware of these filing requirements can cause U.S. expatriates to incur avoidable fines.
Filing your taxes late isn’t ideal, but it can happen. To prevent that from occurring, seek help from dedicated accountants, like the CPAs for American expatriates at US Tax Help. Moving abroad can cause many stressors, but filing your taxes doesn’t have to be one of them. Understanding how the United States Tax Code applies to you as an expatriate requires the insight and skill of qualified accountants.
Our CPAs Can Help U.S. Expats File Their Taxes on Time
Filing your taxes on time isn’t always easy for U.S. expatriates. Our team can streamline the process so that you file within the deadline. To prevent filing late, call the CPAs for American expatriates at US Tax Help at (541) 362-9127, or visit us online today.