When Do U.S. Expats Have to File Taxes?
Tax season can be stressful for even the most seasoned tax veterans, and all the more so for expats living in foreign countries. That’s because there are a number of unique provisions that only apply to Americans who live overseas, complicating the already arcane process of filing taxes each year. Although the deadline stays the same — even in 2020, tax returns must still be filed by April 15 — there is some flexibility in how this deadline applies to expats, though even these ostensibly helpful provisions come with their fair share of caveats and exceptions. If you or someone you know would like help preparing a U.S. expat tax return for 2020, an accountant for expat tax return preparation at U.S. Tax Help can provide the assistance you need. To find out more, keep reading as we explain when U.S. expats have to file taxes in 2020.
When Are Tax Returns Due for U.S. Expats?
As you may already know, the American tax deadline is April 15 every year — unless that date falls on a weekend, in which case the deadline is the following business day. This deadline also applies to U.S. expats, though those living and working abroad have the benefit of several possible extensions that help prevent the late filing of taxes by expats; these options are detailed below.
Automatic 2-Month Extension
One of the many perks of living abroad is the fact that the Internal Revenue Service grants an automatic two-month extension to Americans who live and work outside of the U.S. and Puerto Rico, making the de facto filing deadline for expats June 15. If the typical April 15 deadline is pushed back due to a weekend or holiday, so is the extended date.
There is no required form to get this extension; all you have to do is attach a statement to your tax return explaining that you live and conduct business in another country, and the IRS will apply the new deadline to your return. However, it is important to note that any unpaid taxes will begin accruing interest on April 15, even if the filing deadline is pushed back; to avoid this, make sure that your tax obligations have been settled by April 15.
Automatic 6-Month Extension
If the automatic two-month extension will be insufficient, you can file for a six-month extension instead. Keep in mind that filing for this extension does not add an additional six months to the previous two-month extension, though you can add four months for a total of six extra months in which to file your return. Again, keep in mind that this is an extension to file, not an extension to pay; any taxes you owe will begin accruing interest on the regular April 15 deadline, and you may even be charged a penalty if you do not pay what you owe by the extended June 15 deadline.
To get these extra six months, you must file IRS Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. This form is generally due by your regular tax deadline, but expats who chose to use the two-month extension have until June 15 to request additional time. Fortunately, Form 4868 can be filed either by mail or electronically; if your request is granted, your new filing deadline will likely be October 15.
Additional 2-Month Extension
Taxpayers living outside the United States can request yet another extension in addition to those outlined above, pushing their final tax return filing deadline all the way to December 15. However, this extension is a bit more difficult to claim; to get it, you must send a letter to the IRS office in Austin, Texas, explaining why you need two more months to file. (Note that you will not receive a notification if your request is granted, but you will if it is denied.) This extension is not available to taxpayers who filed Form 2350 and were approved.
Residency Test Extension
The last extension on our list is only available to those who need additional time to pass one of the two IRS residency tests, the bona fide residence test or the physical presence test. The point of this extension is to help expats seeking to qualify for benefits like the foreign earned income exclusion or foreign housing deduction; keep in mind, however, that other factors can affect these benefits, such as whether you work for a company or are a self-employed expat.
If approved, the extension will move that taxpayer’s filing deadline to 30 days beyond the date on which they can expect to pass either of the tests mentioned earlier. To claim this extension, file Form 2350, Application for Extension of Time to File U.S. Income Tax Return, with a local IRS representative or mail it to the IRS office in Austin.
Experienced Tax Accountants Helping Expats Around the World
All told, expats can benefit from several extension opportunities that offer significant additional time to file their tax returns. If you are an American who lives and works abroad and would like assistance with filing for one of these extensions, or if you missed your deadline and need to file delinquent taxes, the experts at U.S. Tax Help can guide you through the process. Our team of skilled international tax specialists has aided clients around the world in tackling the toughest, most convoluted issues, and we can put that experience to work for you. To learn more about the services offered at U.S. Tax Help or to set up a consultation, visit us online or call (541) 362-9127 today.