We definitely understand how US taxes stress out individuals. This is only amplified for those who need to take international living into consideration. If this is your first time filing US taxes while overseas, you are likely especially stressed out by the new forms and schedules you need to file. We understand this, as does the IRS! The IRS recently published a few ways to reduce stress through tax time. Some of these tips were particularly helpful for those paying US taxes overseas. We wanted to share some of these tips with you to help reduce the stress of US tax preparation.
Request an Extension to File Your US Taxes – But Pay on Time!
While the IRS does allow for individuals to extend the due date of their taxes, payment is still considered to be due on tax day (April 17th this year, 2012). Failing to pay will result in an increased balance as the IRS charges interest on any unpaid taxes. While putting your taxes on hold may be convenient, a larger balance when it is time to pay will certainly cause more stress!
Request an extension of time to file – but pay on time. If the deadline clock is ticking, you can get an automatic six-month extension through Oct. 15. However, this extension of time to file, which must be filed or postmarked by the April 17 deadline, does not give you more time to pay any taxes due. If you have not paid at least 90 percent of the total tax due by the April deadline you may also be subject to an estimated tax penalty. You can obtain an extension through Free File at www.irs.gov/freefile. Or, file Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, available for downloading at www.irs.gov or by calling 800-TAX-FORM (800-829-3676) to have a paper form mailed to you. Allow at least 10 days for mailed forms and publications.
If you cannot file your taxes for one reason or another and need to estimate your taxes, do so by contacting a tax expert and figuring out what you might owe the IRS when you do file your taxes.
Can’t Pay Your US Taxes? It’s Not as Bad as You Think!
The IRS understands that not everyone is able to pay taxes immediately when they file and has options in place for those who intend to pay taxes but simply cannot do so financially at the the time of filing.
Don’t panic if you can’t pay. If you can’t pay the full amount of taxes you owe by the mid-April deadline, you should still file your return by the deadline and pay as much as you can to avoid penalties and interest. More than 75 percent of taxpayers eligible for an Installment Agreement can apply using the web-based Online Payment Agreement application available at www.irs.gov. To find out more about this simple and convenient process, type “Online Payment Agreement” in the search box at www.irs.gov. You can also contact the IRS to discuss your payment options.
You Need to File Your Taxes – Why Wait?
Many people put off the burden of filing US taxes because they have questions, or may not know where to get started, or may be waiting on information. Getting started ahead of time will get the ball rolling, and will get the daunting task of filing your taxes off your shoulder. Getting started is the first step in taking care of your obligation to file US taxes!
Don’t procrastinate. Resist the temptation to put off your taxes until the very last minute. Rushing to meet the filing deadline may cause you to overlook potential sources of tax savings and will likely increase your risk of making an error.
More Information on US Taxes
Read all six of the IRS’s tips for reducing tax-time stress here. We also have a blog post that goes over how to correctly file your US taxes. If you have any other questions or would like to learn about our expat tax services, please contact us.