Looming tax filing deadline for U.S. taxpayers living abroad


IRS

WASHINGTON – The Internal Revenue Service today reminded taxpayers living and working outside the United States to file their 2020 federal income tax return by Tuesday, June 15. This deadline applies to both U.S. citizens and foreigners residing abroad, including those with dual nationality.

Just as most taxpayers in the United States are required to file their tax returns with the IRS on time, those who live and work in another country are also required to do so. An automatic two-month extension is normally granted for people abroad and in 2021 this date is still June 15, even if the normal income tax filing deadline has been extended by one. month from April 15 to May 17.

Benefits and qualifications

A tax filing requirement generally applies even if a taxpayer is eligible for tax benefits, such as the Exclusion of income earned abroad or the Foreign tax credit, which significantly reduce or eliminate tax payable in the United States. These tax benefits are only available if an eligible taxpayer files a US tax return.

A taxpayer is eligible for the special June 15 filing deadline if their tax domicile and residence is outside the United States and Puerto Rico. Those serving in the military outside of the United States and Puerto Rico on their usual tax filing due date are also eligible for the extension until June 15. The IRS recommends attaching a return if either of these two situations applies.

Declaration required for foreign accounts and assets

Federal law requires U.S. citizens and resident aliens to report all worldwide income, including income from foreign trusts and foreign bank accounts and securities. In most cases, the taxpayers concerned must complete and attach Annex B to their income tax return. Part III of Schedule B asks about the existence of foreign accounts, such as bank and securities accounts, and generally requires U.S. citizens to declare the country in which each account is located.

In addition, some taxpayers may also have to complete and attach to their return. Form 8938, Statement of Foreign Financial Assets. Generally, U.S. citizens, resident aliens, and certain non-resident aliens must report the foreign financial assets specified on this form if the aggregate value of those assets exceeds certain thresholds. See the instructions on this form for more details.

Deadline for declaration of foreign accounts

Regardless of the declaration of foreign financial assets specified in their tax return, taxpayers with an interest, signature or other authority over foreign financial accounts whose total value has exceeded $ 10,000 at any time in 2020, must file electronically with the Treasury Department a financial crime network. (FinCEN) Form 114, Foreign Bank and Financial Accounts Report (FBAR). Because of this threshold, the IRS encourages taxpayers with even relatively small foreign assets to check whether this reporting requirement applies to them. The form is only available via the BSA e-filing system website.

The deadline for filing the annual declaration Foreign Bank and Financial Accounts Report (FBAR) was April 15, 2021, but FinCEN grants registrants who have exceeded the initial deadline an automatic extension until October 15, 2021 to file the FBAR. It is not necessary to request this extension.

Report in US dollars

Any income received or deductible expenses paid in foreign currency must be reported on a US dollar tax return. Likewise, any tax payment must be made in US dollars.

The FINCEN 114 form and IRS 8938 form require the use of a December 31 exchange rate for all transactions, regardless of the actual exchange rate on the date of the transaction. Generally, the IRS accepts any posted exchange rate that is used consistently. For more information on exchange rates, see Foreign currency and exchange rate.

Reporting expatriates

Taxpayers who renounced their U.S. citizenship or ceased to be lawful permanent residents of the U.S. in 2020 must file a dual status alien tax return and attach Form 8854, Declaration of Initial and Annual Expatriation. A copy of Form 8854 must also be filed with the Internal Revenue Service, 3651 S IH35 MS 4301AUSC, Austin, TX 78741, before the tax return due date (including extensions). See the instructions for this form and Notice 2009-85 PDF, Guide for Expats under Section 877A, for details.

More time is available

Extra time is available for those who cannot meet the June 15th date. Individual taxpayers who need additional time to file their return can request an extension of the return until October 15 by printing and mailing it. Form 4868, Request for Automatic Extension of Time to File a United States Personal Income Tax Return. The IRS cannot process extension requests filed electronically after May 17, 2021. Learn more Where to send the form.

Businesses that need more time to file their tax returns should file Form 7004, Request for an Automatic Extension of Time to File Certain Business, Information and Other Income Tax Returns.

Extension of the combat zone

Soldiers are entitled to a additional extension of at least 180 days declare and pay taxes if any of the following apply:

  1. They serve in a combat zone or have qualifying service outside a combat zone or
  2. They serve on deployment outside the United States away from their permanent duty station while participating in an emergency operation. This is a military operation designated by the Secretary of Defense or involving the calling in of uniformed service members to active service (or maintaining them in active service) during a war or national emergency declared by the President or the Congress.

The deadlines are also extended for individuals serving in a combat zone or a contingency operation in support of the Armed Forces. This applies to Red Cross personnel, accredited correspondents and civilian personnel acting under the direction of the Armed Forces in support of these forces.

Spouses of people who have served in a combat zone or contingency operation are generally entitled to the same time extensions with a few exceptions. Extension details and more military tax information is available in IRS publication 3, Tax guide for the armed forces.

Visit IRS.gov for tax information

Tax help and filing information is available anytime on IRS.gov. The IRS website offers a variety of online tools to help taxpayers answer common tax questions. For example, taxpayers can search for the Interactive tax assistant, Tax matters and Frequently Asked Questions for answers to common questions. IRS.gov/paiements provides information on electronic payment options.

Other resources:

  1. About Publication 54, Tax Guide for U.S. Citizens and Foreign Residents Abroad
  2. About US Tax Guide for Aliens Publication 519
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