The last deadline for expats with an extension is tomorrow, October 15th. If you are an American living abroad who hasn’t filed this year but has received income, this means you’ll be filing taxes late. Though the phrase better late than never does apply here, you’re going to want to get your annual filing finished as soon as possible, primarily due to the looming compliance crackdown the IRS has promised. Below, we’ve compiled the info you need to get you started so you can stop sweating your taxes and get back to your regularly scheduled October activities.
To Whom Does the October Deadline Apply?
One of the many quirky things about American citizenship is that it doesn’t matter if you move abroad; you’re still on the hook to file an annual Federal Tax Return. It doesn’t even matter if you don’t owe the American government tax dollars; you’re still on the hook to file. The thresholds for income that triggers a tax-filing requirement are very low:
- Single with income over $12,000
- Married filing jointly with income over $24,000
- Married filing separately with income over $5
- Self-employed individuals need to file if their income is over $400
If you fit any of the above categories, you will need to submit an annual tax return even while you’re living abroad, and even if you aren’t earning money in America.
October 15th is the deadline for expats who requested an extension by June 15th. But, let’s backtrack. April 15th is the general tax-filing deadline for all American citizens. Expats get an automatic two-month extension until June 15th because of the complexity of filing taxes abroad and the additional reporting requirements it entails. Expats who realized they wouldn’t meet the June 15th deadline and would be filing taxes late can request an extension until October 15th. This is essentially the last deadline for filing, though in extreme circumstances the IRS occasionally allows a final extension through December 15th.
How Can Expats Filing Taxes Late Get Caught Up?
If you were surprised by the filing requirement, you’re not alone. The continued obligation to file tax returns is rare: only one country other than America requires it, and that country is Eritrea. Many expats never realized they were still supposed to file informational returns each year, and can be caught off guard by the compounding fees and penalties of tax non-compliance.
Not only are you required to file Federal Tax Returns, but you may also have other filing requirements that you didn’t have before you moved out of the country. For instance, anyone who has $10,000 or more (at any point during the year, even a moment) in all of their foreign bank accounts combined will need to file an FBAR (Foreign Bank Account Report).
The Streamlined Filing Procedures can typically be used for those who didn’t realize they were supposed to file and, as a result, are filing taxes late. These procedures are an amnesty program created by the IRS to encourage noncompliant taxpayers to come forward voluntarily; in return, they waive the penalties that are usually applied to these filings. To use these procedures, you need to file:
- Three years of delinquent Federal Tax Returns
- Six years of FBARs
- Form 14653 to certify tax delinquency was non-willful
So, if you’re filing taxes late, the Streamlined Filing Procedures can be a real lifesaver. The only catch is that if you wait for the IRS to contact you first, you are no longer eligible to use them. The reason for this is that you aren’t so much coming forward as you are getting caught in the act of filing taxes late. The takeaway here is that waiting can penalize you significantly, you can end up owing more, and you may face a more stressful situation. Getting caught up sooner rather than later is the best idea for anyone in this situation.
Filing Taxes Late? Greenback Can Make It Easy!
Greenback’s accountants specialize in expats taxes. It’s not a niche for us; it’s all that we do! Get started with Greenback, and you’ll know you’re taxes are in the best possible hands.