As an American living and working abroad, it is essential to be aware of the upcoming tax deadline. The regular tax deadline was on April 15 for most taxpayers, but there is an automatic two-month extension for those who live outside the country, including U.S. citizens, resident aliens, and dual citizens. This extension means that the deadline to file your 2023 taxes is quickly approaching on June 17.

Qualifying for the Extension

To qualify for the June 17 deadline, you must either live outside of the U.S. and Puerto Rico or serve in the military outside the country during the regular tax deadline. The IRS requires you to attach a statement to your return explaining which situation applies to you. It is important to pay any balance due as soon as possible to avoid accruing interest after the original April 15 deadline.

Payment Options

The IRS provides several fast and easy ways to make payments, including through an IRS Online Account, Direct Pay, and the Electronic Federal Tax Payment System. However, if you are unable to meet the June 17 deadline, you can file for a tax extension by submitting Form 4868 by the deadline, which will extend your filing due date to October 15.

In addition to income tax filings, American expats may face additional reporting requirements. These can be complex, and errors can result in costly penalties. For example, some expats must report foreign bank accounts by filing the Report of Foreign Bank and Financial Accounts (FBAR) if the combined account value exceeds $10,000 at any time during the year. The deadline for FBAR filing is typically on April 15, but the automatic extension means taxpayers have until October 15 to submit the form.
Expats may also need to complete and attach Form 8938 if certain foreign assets exceed yearly thresholds. Failing to file the FBAR or Form 8938 can lead to penalties of up to $10,000 or more, depending on the circumstances, as outlined by the IRS.

A recent survey revealed that approximately 1 in 5 American expats do not feel comfortable filing U.S. taxes while living abroad. Given the complexity of the tax system and the added reporting requirements for expats, seeking assistance from tax professionals can help ensure compliance and avoid costly mistakes. It is crucial to be aware of the deadlines, requirements, and available payment options to navigate the tax obligations effectively.

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