Automatic Filing Extension for US Individual Tax Return Filers Living Overseas
Updated: Sep 1
Did you know that as an Individual Tax Return Filer living overseas you will likely qualify for the Automatic Extension of time to file your tax return?
Most US based individual tax return filers have April 15 marked down in their mental calendar as “Tax Day”.
April 15 is the date US individual tax return filers must file and pay any tax due for the previous calendar year in order to avoid incurring interest and a late filing /late payment penalty to boot. But how does the US individual filing deadline differ for US individual tax return filers living overseas?
The IRS understands that it may be harder to obtain all the necessary information to complete a tax return for US Individual tax return filers living overseas, especially if the Taxpayer is residing in a country with a fiscal year end (e.g UK tax year runs to April 5), and so will usually grant an automatic two month filing extension. Meaning that the IRS will automatically allow US individual tax return filers living overseas to push their deadline back to June 15.
If by June 15 a US Individual tax return filer living overseas still requires additional time to collate their documents and file their tax return, they should always request an extension of time to file to October 15 on Form 4868 by their due date.
However be careful!
The automatic and additional extensions requested will only cover US Individual tax return filers living overseas to file their tax return by the extended date and avoid late filing penalty – any tax owed must still be paid by April 15. If the tax due is not paid by April 15 then interest will be assessed on the amount due from April 16 as well as a possible late payment penalty.
But why would a US Individual tax return filer living overseas owe US tax?
There are many possible reasons - for example, US Individual tax return filers living overseas may live and work in country which has a lower tax rate than the US, perhaps they don’t qualify for the Foreign Earned Income Exclusion, they could still receive income e.g rental income from U.S. sources, or perhaps they might receive favorable or zero rates of tax on their foreign investment income.
Finally, US Individual tax return filers living overseas should not forget FinCEN Form 114 – also known as the “FBAR” which is a Treasury filing requirement that also follows the IRS original deadline of April 15. The FBAR reports foreign financial accounts from foreign bank accounts to foreign pensions (sign up with USTaxGlobal to receive our free FBAR guide!), in recent years the IRS have granted an automatic extension to file the FBAR by October 15 - watch this space for confirmation of the automatic extension to October 15, 2020 for the 2019 FBAR.
If the due date falls on a Saturday, Sunday or US legal holiday, the filing due date is delayed until the next business day.
Still not sure about things?
Use the expertise of the tax professionals at USTaxGlobal.com to file your extension and prepare your Expat Tax Return