Yes, that time has come again – tax season officially began Monday. Now that the IRS opened the tax filing season, gathering tax documents is likely at the top of many expat’s to-do list. The IRS has provided details regarding important dates to mark on the calendar as well as information regarding the issue of refunds. Below, we’ve answered all your questions about filing 2018 expat taxes.
How Should I Prepare?
It is never too early to start gathering your tax information. Filing your tax return early in the tax season will not only reduce your to-do list, it can also save you money! Plus, there is a good chance that it will be completed faster, particularly if you are having a tax professional assist you. If you can beat the deadline rush, you will find yourself stress-free – in terms of your 2018 expat taxes, anyway.
Being prepared can go a long way toward making the filing process easier and less rushed. Here are a few tips:
- Have your year-end tax statements ready to go so you won’t be searching at the last minute. If you haven’t received all of them yet, don’t panic! Forms 1099 do not have to be issued until January 31, so you can expect the remainder shortly.
- Keep six years of prior tax returns in case you are audited. The previous year’s return is also a helpful reference when beginning a new tax return.
- File early, even though US expats have until June 15 to file. Not only will you cross it off your to-do list, but also if you pay what you owe the IRS by the April tax deadline (in 2018, it’s April 17), you won’t accrue any interest.
When are the Deadlines?
Since April 15 occurs on a Sunday in 2018, and Emancipation Day (a legal holiday in Washington, DC) falls on Monday, April 16, the April filing deadline will be Tuesday, April 17, 2018. Any tax due for the 2017 tax year will also be due on this date and will begin to accrue interest if paid at a later date.
US expats living outside of the US on April 17, 2018 receive an automatic two-month extension to file taxes, making the deadline June 15. There is also the option to request an additional extension until October 15, which is the final deadline to file your 2017 Federal Tax Return.
The Foreign Bank Account Report (FBAR) deadline has settled into its new time slot and again will fall on Tax Day, April 17. However, US expats will receive a two-month extension automatically and can request an additional extension to October 15 for filing FBAR. Please note: October 15 is the final deadline for filing FBAR. The penalties for not filing your FBAR are quite severe, so be sure you’re aware of your requirement to file and that you gather the necessary documents ahead of the deadline.
When Will I Receive My Refund?
As was the case in previous years, e-filing and direct deposit continue to be the fastest and safest way to file your expat tax return accurately and receive a timely refund. The IRS anticipates it will issue more than 9 out of 10 refunds within 21 days, though certain factors will affect the process for some individuals.
By law, the IRS is required to hold refunds claiming the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) until February 15. Due to processing times, weekends, and the President’s Day holiday, affected taxpayers likely won’t have access to these refunds until the week of February 26.
In general, once the IRS releases refunds, additional processing steps are required and financial institutions may take some time to accept and deposit the refunds in your bank account(s). Most financial institutions do not process payments on weekends or holidays, which may affect when you receive your refund. Once you’ve filed your US expat taxes, you can visit the Where’s My Refund tool on the IRS website to get an estimate of when you can expect your refund.
Have More Questions?
We can help you with any of your questions about filing expat taxes in 2018. Contact Greenback today!