Anyone who waits until the date of their tax extension to submit a payment may also be responsible for interest and penalty charges.
New York, NY (PRWEB) April 09, 2013
With the April 15th tax deadline looming, many US taxpayers are scrambling to complete the correct paperwork. US expats living abroad, however, automatically qualify for an extension until June 17, 2013 in part to allow expats the time they need to track down relevant documentation on foreign earned income during the 2012 tax year. If necessary, Americans living abroad can file an extension on their tax return until October 15.
“It’s important to remember that the extension is for the tax return itself and not the actual taxes due,” says Greenback President David McKeegan. “In other words, if expats owe taxes to the US government, they are expected to estimate what they owe and make the payment by April 15. Anyone who waits until the date of their tax extension to submit a payment may also be responsible for interest and penalty charges.”
Expats should be aware of some important tax changes, including an increase to the maximum amount of foreign earned income that can be excluded. Under the Foreign Earned Income Exclusion (FEIE), US expats filing 2012 tax returns can exclude up to $95,100 of their foreign earned income, and the exclusion amount will increase to $97,600 for the 2013 tax year.
Another big development falls under the American Taxpayer Relief Act of 2012, which provides a permanent increase of the capital gains tax rate to 20%, up from 15%. This tax rate applies to the following taxpayers:
- Single filers with incomes above $400,000
- Married couples filing jointly with combined incomes above $450,000
“Since many US expats are somewhat removed from the tax process in the United States, it’s important to keep these individuals informed about tax changes that apply to them,” said Mr. McKeegan. “Changes to foreign income exclusions, tax rates and capital gains, for example, can make a significant impact on a US expat’s tax situation.”
In addition, some notable changes for the 2013 tax year include a Social Security Wage Base increase from $110,100 in 2012 to $113,700 in 2013. The Personal Exemption Phaseout (PEP), which reduces personal exemptions for taxpayers and their dependents by 2%, will likely be reduced for high-income taxpayers in 2013. Plus, an additional tax rate of 39.6% will be added to the 2013 tax rate schedule.
More About Greenback Expat Tax Services
For more information about Greenback Expat Tax Services, FATCA, FBARs, or other issues related to US expat taxes, please email Greenback Expat Tax Services at info(at)greenbacktaxservices(dot)com. You can also visit us at http://www.greenbacktaxservices.com.
Greenback Expat Tax Services specializes in the preparation of US expat taxes for Americans living abroad. Greenback offers straightforward pricing, a simple, hassle-free process, and CPAs and EAs who have extensive experience in the field of expat tax preparation. For more information, please visit http://www.greenbacktaxservices.com.