Tax Return Extensions for Expats, US citizens and Green Card Holders living abroad
If you’re an expat living outside the U.S. or moving between the United States and another country regularly, it can be confusing when it comes to filing your US federal tax return. Because different countries support different tax years, there are some discrepancies in tax return filing dates, so it’s important that you understand when you should request a tax return deadline extension and why.
When is my tax return deadline?
This year, the tax return deadline is April 18. This has moved from April 15 as it was in previous years due to public holidays, so it gives you an extra couple of days to get your finances and paperwork in order. If you happen to be in the United States on April 18, then this is the filing date that you’ll need to adhere to.
However, if you’re outside the United States on this date, then you have a little longer. If you’re living abroad at the time that your return would normally be due, you get an automatic extension up until June 15.
You don’t need to apply for this extension, just declaring yourself outside the U.S. will be enough to grant this extension when you eventually file your federal tax return.
When should I apply for an extension?
If you are in the U.S. on tax deadline day, but still feel you’ll be struggling to meet it, then you will need to apply for the extension in order to give yourself a little extra time. When you apply for this, you may be granted the extra 2 months by the IRS.
If you are living outside the U.S. and have the automatic extension to June 15, but still feel you need a little extra time, then you will need to apply for a further extension to grant you up to October 15 to file. This is common practice for expats living in the UK and especially Australia, where the tax year finishes on June 30, leaving no time to file your return. This Form 4868 extension needs to be applied for before June 15 to be granted.
If you’re still struggling, there’s an extra extension on top of these which could give you up until December 15 to file. However, this is something that must be granted by the IRS on a discretionary basis based on your circumstances. This extension is never guaranteed, so you shouldn’t rely on it unless absolutely necessary.
How do I apply for a filing extension?
Applying for a tax deadline extension can be done in a couple of ways.
Initially, based on living outside of the United States, you’ll be granted an automatic 2-month extension. This may also happen in emergency situations, for example, states that have suffered a natural disaster will automatically be granted an extension on their return.
The easiest way to apply for an extension is to contact a professional tax filing service that specializes in expats. They will be able to apply for any extensions necessary and give you the best chance of an extension being granted based on your circumstances.
Expat US Tax offers an Express Extension Service that takes 2-minutes:
Apply your extension here
Alternatively, you can apply directly with the IRS website but it is a cumbersome process. You may be asked to supply reasons or documentation to support your reason for an extension.
General Tax Returns Vs. State Tax Returns
Some states no longer accept general federal tax returns and therefore, don’t accept general extension requests through the IRS. New York is an example of this, where they recently changed to only accept state extensions for tax return deadlines.
You should be able to find your state online to discover exactly what you need to do if you have to apply directly to the state for a tax return extension. However, to make sure you’re doing the right thing, it’s better practice to talk to a tax professional, as they are more likely to understand the ins and outs of each state’s tax laws and requirements, meaning you’re less likely to go wrong.
I want to know more about US Taxes abroad
Does the federal extension cover Form 3520-A for Foreign Trusts?
Foreign trusts often catch people out when they’re filing their tax return. Foreign trusts are filed for many reasons such as being an owner or beneficiary of a family trust, certain types of investments, pensions, superannuation, KiwiSaver accounts and more.
Form 3520 and Form 3520-A is likely required to report your Foreign Trust.
These foreign trust returns need to be filed on March 15 of the tax year. This means that you’ll need to apply for an extension before this date if you require one. This can catch people out as many think they have that extra month until April 15 to apply for an extension. Don’t make that mistake!
If you need an extension for a foreign trust, make sure you apply before March 15 otherwise you may incur late filing penalties.
If you’ve already missed this deadline, then don’t go ahead and file your 3520-A right away!
Doing this will notify the IRS of your tardiness and you will likely receive a penalty of $10,000.
Instead, if you’re already late filing, speak to a tax professional who specializes in expats, as they may be able to find a solution based on your situation to mitigate those sizable fees.
What happens if I don’t apply for an extension?
You’ll likely get a late-filing penalty if you owe the IRS any tax.
The biggest mistake that people make is not applying for an extension on time.
It’s understandable, on occasion, that you might not have all the documentation ready to file on the deadline. In this case, applying for an extension is the best thing to do. It gives you a little extra time to get your ducks in a row.
However, don’t mistake these granted extensions as an extension on your deadline to pay your tax. Your tax deadline will always remain the same, regardless of your extension dates.
If you owe tax and fail to pay by April 18, then your tax will start to incur interest. Paying your tax in full by the deadline means that you won’t have to pay any interest, then have a few more months to pull together your return if you’ve requested an extension.
Remember: a tax return deadline extension only extends the time you have to fill in the return. You still need to pay your tax. If you’re unsure how much you’re due to pay, a tax professional will be able to use calculated estimates to give you an approximate figure.
If you’re late paying your tax and haven’t requested an extension on your return, you’re likely to have to pay interest on your tax alongside a penalty to the IRS for late filing.