Typically, October 15th is the final deadline for Foreign Bank Account Reporting (FBAR). This year, on October 6th, the US Treasury Department announced that the FBAR deadline for Federal tax year 2019 had been extended from October 15, 2020 to December 31, 2020 for those affected by recent natural disasters.
Then, on October 14th, a messaged appeared on the Treasury website, stating that the deadline had been extended to December 31st for all filers. Only, it wasn’t true. The message had been an error and was removed within 24 hours.
But it was enough time to confuse filers. To make up for the mistake, the Treasury Department will allow filers to submit their FBARs by October 31, 2020 and still be considered on-time. Plus, the December 31st extension is still available to disaster victims.
The tax deadline remains the same.
Whether or not you’ll be filing your FBAR at a later date, taxes are still due on October 15, 2020. So if you intended to file by the October deadline, you should complete your taxes and FBARs as planned.
Filing your taxes or the FBAR late could mean extra fees and penalties. So expats should not postpone filing in light of the new special FBAR extension.
Who can use the FBAR deadline extension?
The October 31st FBAR extension is available to all filers. This grace period gives filers time to complete the FBAR following the confusion over the due-date caused by the erroneous message on the Treasury website on October 14, 2020.
The December 31st FBAR extension makes it easier for Americans who’ve been impacted by California Wildfires, the Iowa Derecho, Hurricane Laura, the Oregon Wildfires, and Hurricane Sally to meet their requirements without incurring the usual FBAR-related penalties. Due to the requirements of this extension, it is only available to those living in the United States.
Expats should file by the October 15th deadline as planned.
What happens if I wait to file late?
The US Treasury imposes expensive penalties for late FBARs, up to $10,000 per violation. In addition, if you fail to file your US Federal tax return by the final deadline of the year, October 15th, you may have to pay the IRS’s late-filing and late-payment penalties. Overall, it’s important that you file all the required forms on time to save money.
What about the December 15th Deadline?
It is possible for expats to extend the tax deadline to December 15th for special circumstances, but this is a discretionary deadline and there is no guarantee that the IRs will approve your request.
To apply for the extension, you’ll need to send the IRS a letter explaining the reasons you need more time by October 15th.
If you think you need this extension, we recommend you speak with a tax professional as soon as possible. Because the IRS is not required to approve your extension request, it’s important that you explain your situation fully and accurately.
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