This week, the IRS announced the start date for tax season 2020: January 27th. That means you can’t file your return until January 27th, but you can make sure you’re ready beforehand. Here’s how expats can prepare this season.
Documents for Tax Season 2020
If you’re an American living abroad, you can start getting all of your necessary tax documents ready now. The documents should include last year’s tax return, your travel calendar (which can help you qualify for exclusions and credits), wage and other income documents, and more. For a full list of documents you might need, download our free document checklist, and you’ll be ready in a flash.
Put These Dates on Your 2020 Calendar
January 27th isn’t the only relevant date this year. Circle these dates on your calendar so that you aren’t taken by surprise.
April 15th: This is the tax deadline. Any tax you owe will start accruing interest, regardless of any extensions you qualify for.
June 15th: Expats receive an automatic two-month extension to file their taxes, no paperwork necessary! So, if you’re running late, you can meet the June 15th deadline without incurring penalties. But again, interest will have been accruing since April 15th on any tax you owe.
October 15th: Americans living abroad who are not ready to file their Federal Tax Returns by June 15th can submit Form 4868 to receive an additional extension to October 15th.
December 15th: If more time is necessary, expats should write a letter to the IRS requesting a final two-month extension to December 15th. This extension is discretionary and should only be used as a last resort. If all you need is more time to qualify for the Foreign Earned Income Exclusion, in most cases, we recommend that you file Form 2350 to request additional time rather than trying for a December extension.
Know What to File
The required forms and schedules vary based on each taxpayer’s unique situation. But some of the most frequent obligations include:
Federal Tax Return: Almost every expat is required to file this annually, even if no tax is owed.
State Tax Return: Depending on which state you moved from, you may be on the hook for a state tax return as well.
FBAR: FBAR stands for Foreign Bank Account Report. This is a report you have to file if your foreign bank accounts, in aggregate, total at least $10,000 at any point throughout the tax year.
Form 8938: Form 8938 satisfies the requirements of FATCA, or the Foreign Account Tax Compliance Act. For single filers, the thresholds are met if you had assets of at least $200,000 on the last day of the year or $300,000 at any time throughout the tax year. If you are married filing jointly, the threshold is $400,000 on the last day of the year or $600,000 at any time throughout the tax year.
If you sold real estate, are a shareholder in a foreign corporation, have a controlling interest in a foreign partnership, or meet certain other specified financial circumstances, you will likely need to file more forms.
Get Started With Greenback and Tax Season 2020 Will Be Easier Than You Expected
There’s a reason we’ve helped over 10,000 expats with their taxes worldwide. Find out how stress-free we can make your taxes this year.