What Expats Must Know about U.S. Tax Deadlines 

What Expats Must Know about U.S. Tax Deadlines

What Expats Must Know about U.S. Tax Deadlines 

When a U.S. Person resides outside of the United States, they are considered ‘expats’ for U.S. tax purposes. Unfortunately, since the U.S. follows a worldwide income tax model, even if the Taxpayer resides outside of the United States for the entire year and earns all of their money from foreign sources, they are still subject to U.S. taxes on the income — and required to report their global income to the U.S. government. But, since the Taxpayer resides outside of the United States, some of the due dates differ from those for Taxpayers who reside in the U.S. These dates are important, since penalties for late filing can be significant (especially when foreign accounts, trusts, and corporations are involved). Let’s look at some of the key filing deadlines that expats across the globe should be aware of:

Individual Tax Return

For most taxpayers, the individual tax return and disregarded entity due dates are the most important in order to ensure tax compliance. The dates for 2023 include:

      • 4/18: Original filing due date
      • 6/15: Date for Taxpayers living abroad
      • 10/16: Extension deadline
      • 12/15: Additional extension deadline for taxpayers abroad (additional requirements must be met)

Corporate Tax Return (Depends on Structure)

Corporate tax returns have different due dates than individual tax returns. Typically, there is a one-month difference in the filing due date — noting that corporate due dates may vary depending on whether the taxpayer uses a different corporate tax year.

      • 3/15: Corporate due date
      • 9/15: Corporate tax returns on extension

International Reporting Forms

When it comes to international reporting forms, the due dates are typically on the same day that the taxpayer’s tax return is due. For example, an individual taxpayer with an April 18th due date is required to include all the international forms that would otherwise be required on that date, such as Forms 5471 and 8865 (other international reporting such as Forms 3520 and 3520-A may have different due dates depending on whether it is a gift from a foreign person or a trust issue). Likewise, even if a Taxpayer does not have to file a tax return they are still required to file certain international information reporting forms that they would otherwise be required to file, such as forms 5471, 8865, and 3520-3520-A.

FBAR Extension

For the past several years, the FBAR is on automatic extension. That means the taxpayers automatically have until October 16 to file the FBAR even if they did not file an extension for their regular tax return.

As provided by FinCEN:

      • FinCEN would like to reiterate, as previously announced on our website, the annual due date for filing FBARs for foreign financial accounts is April 15. This date change was mandated by the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, Public Law 114-41 (the Act). Specifically, section 2006(b)(11) of the Act changed the FBAR due date to April 15 to coincide with the Federal income tax filing season. The Act also allows an extension of the filing deadline of up to six months. To implement the statute with minimal burden, FinCEN will grant filers failing to meet the FBAR annual due date of April 15 an automatic extension to October 15 each year. Accordingly, specific requests for this extension are not required. =
      •  The FBAR filing deadline will follow the Federal income tax due date guidance, which notes that when the Federal income tax due date falls on a Saturday, Sunday, or legal holiday, the due date is delayed until the next business day.
      • (See https://www.irs.gov/filing/individuals/when-tofile.)

Foreign Earned Income Exclusion and Form 2350

For taxpayers who seek additional time in order to meet the requirements of the foreign earned income exclusion, they would file a form 2350 as an extension. As provided by the IRS:

      • Use Form 2350 to ask for an extension of time to file your tax return only if you expect to file Form 2555 and you need the time to meet either the bona fide residence test or the physical presence test to qualify for the foreign earned income exclusion and/or the foreign housing exclusion or deduction.
      • All other taxpayers should file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return, to request an extension of time to file their returns. Note:
      • Do not file Form 2350 more than once for each move overseas. If, after meeting the qualifications for the bona fide residence test or the physical presence test, you remain abroad continuously for the following tax year(s) and require an extension, file Form 4868.
      • File Form 2350 on or before the due date of your Form 1040 or 1040-SR. For a 2022 calendar year return, this is April 18, 2023. However, if you have 2 extra months to file your return because you were “out of the country” (defined next), file Form 2350 on or before June 15, 2023. You should file Form 2350 early enough so that if it isn’t approved, you can still file your return on time.

Filing Refund

In addition, it is important that Expats file tax returns so that they can claim a refund when applicable.

“The latest date, by law, you can claim a credit or federal income tax refund for a specific tax year is generally the later of these 2 dates:

      • 3 years from the date you filed your federal income tax return, or
      • 2 years from the date you paid the tax.
        • This time period is called the Refund Statute Expiration Date (RSED).
        • If you filed your return before its due date, the IRS considers it filed on the due date. If you had income tax withheld or paid estimated tax during the year, we consider those payments to have been made on the return due date.”

Missed Deadline Can be Safely Resolved

For foreign resident taxpayers (or those who did not meet the substantial presence test) who missed the deadline for filing in prior years, the Internal Revenue Service offers a program referred to as the Streamlined Filing Compliance Procedures (Streamlined Foreign Offshore Procedures). Taxpayers who qualify for this program are able to avoid penalties as well as possibly avoid taxes if they qualify for the foreign-earned income exclusion and/or have foreign tax credits sufficient to offset any US tax liability on the foreign income.

Late Filing Penalties May be Reduced or Avoided

For Taxpayers who did not timely file their FBAR and other international information-related reporting forms, the IRS has developed many different offshore amnesty programs to assist taxpayers with safely getting into compliance. These programs may reduce or even eliminate international reporting penalties.

Current Year vs Prior Year Non-Compliance

Once a taxpayer missed the tax and reporting (such as FBAR and FATCA) requirements for prior years, they will want to be careful before submitting their information to the IRS in the current year. That is because they may risk making a quiet disclosure if they just begin filing forward in the current year and/or mass filing previous year forms without doing so under one of the approved IRS offshore submission procedures. Before filing prior untimely foreign reporting forms, taxpayers should consider speaking with a Board-Certified Tax Law Specialist that specializes exclusively in these types of offshore disclosure matters.

Avoid False Offshore Disclosure Submissions (Willful vs Non-Willful)

In recent years, the IRS has increased the level of scrutiny for certain streamlined procedure submissions. When a person is non-willful, they have an excellent chance of making a successful submission to Streamlined Procedures. If they are willful, they would submit to the IRS Voluntary Disclosure Program instead. But, if a willful Taxpayer submits an intentionally false narrative under the Streamlined Procedures (and gets caught), they may become subject to significant fines and penalties

Need Help Finding an Experienced Offshore Tax Attorney?

When it comes to hiring an experienced international tax attorney to represent you for unreported foreign and offshore account reporting, it can become overwhelming for taxpayers trying to trek through all the false information and nonsense they will find in their online research. There are only a handful of attorneys worldwide who are Board-Certified Tax Specialists and who specialize exclusively in offshore disclosure and international tax amnesty reporting. 

Golding & Golding: About Our International Tax Law Firm

Golding & Golding specializes exclusively in international tax, specifically IRS offshore disclosure Contact our firm today for assistance.