The complexity of trying to gather the relevant tax documents when an expat’s host country tax year is different from the US can be overwhelming at best- and impossible for some- as such the June 17th deadline may be impossible to meet for some expats.
(PRWEB) June 13, 2013
Although the US expat tax deadline is June 17th (already including the two month extension for expats), for many Americans living abroad, it’s still simply not possible to file in time. The complexity of trying to gather the relevant tax documents when an expat’s host country tax year is different from the US tax year can be overwhelming at best- and impossible for some- as such the June 17th deadline may be impossible to meet for some expats. For example, for expats living in countries such as Australia (where the tax year doesn’t end until June 30th), critical tax documents such as salary information won’t even be issued until after the US expat tax deadline has past.
Today, Greenback Expat Tax Services, a team of CPAs and IRS Enrolled Agents that specializes in US expat tax preparation, provides critical guidance to US expats who need to understand how to extend their filing deadline.
For Americans who need additional time to file, their best option is to file for an extension to October 15th 2013. The extension request is filed using Form 4868. Form 4868 can be mailed to the IRS or filed electronically. However, for most Americans living abroad, it is much more practical to take advantage of the electronic option given the difficulty and delay in mailing forms back home to the US.
To complete Form 4868, an individual will need his or her personal identification information handy. Personal identification information includes an individual’s social security or tax ID number and mailing address. If spouses are filing jointly, information for both people will be needed.
However, Greenback Co-Founder David McKeegan offers an important word of caution “Although filing an extension is a good option for many, we always recommend filing your taxes as early as you can. Why? Because if any taxes are owed, interest will be due on the underpayment as of April 15th. So, for those that potentially have large tax liabilities it pays to file as soon as possible.”
To minimize interest payments, some expats choose to make an advance payment based on potential taxes owed to minimize their potential interest penalties. If an expat has not yet paid the taxes they owe, a payment should be made as soon as possible to avoid further penalties. For expats who have been abroad for a few years, using the previous year’s tax payment owed is a good way to estimate the current year’s tax obligation. Those Americans living abroad whose situation has changed significantly or who are new to expat life may need to contact a tax accountant who specializes in expat taxes to assess potential taxes due.
Another important distinction, which Americans living abroad need to understand, is how an extension impacts the individual’s FBAR filing requirements. According to Mr. McKeegan, “Regardless of whether you get an extension on your US tax return or not, the FBAR is still due on June 30th every year. The penalties for missing the deadline or not filing can be pretty draconian.” The FBAR, form TDF 90-22.1, must be received (not postmarked) by the Treasury by June 30th. The Treasury Department requires that all US citizens who have more than $10,000 in aggregate in foreign bank accounts at any point during the tax year need to file the FBAR. Some Americans living abroad may also need to file Form 8938 to declare their foreign assets, but this form is part of the federal tax return and will have the same deadline.
Greenback Tax is pleased to offer free extensions to the October 15th deadline to its clients as part of their US expat tax preparation service.
More About Greenback Expat Tax Services
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 about Greenback Expat Tax Services, FATCA, FBARs, or other issues related to US expat taxes, please visit us at http://greenbacktaxservices.com