If you are an American taxpayer who lives and works out of the U.S., you have about two more weeks to file your 2022 federal income tax return. Those taxpayers, including U.S. citizens and residents abroad, face a due date of Thursday, June 15.
June 15 Deadline
The June 15 filing deadline applies to taxpayers who have their tax home and abode (tax speak for residence) outside the U.S. or Puerto Rico, or those who are serving in the military outside the U.S. and Puerto Rico on the regular due date of their tax return—that’s typically April 15 (it was April 18 this year). In that case, the June 15 deadline automatically applies, and you don’t have to take any other steps on April 15 to qualify. However, when you file your return, you should attach a statement indicating which of the two situations applies.
Military Personnel
Members of the military stationed abroad or in a combat zone during tax filing season may qualify for an additional extension of at least 180 days to file and pay taxes.
Unlike the combat zone military pay exclusion, the deadline extensions also apply to taxpayers serving in the combat zone in support of the U.S. Armed Forces, such as merchant marines serving aboard vessels under the operational control of the Department of Defense, Red Cross personnel, and civilian personnel acting under the direction of the U.S. Armed Forces in support of those forces. Members of the U.S. Armed Forces who perform military service in an area outside a combat zone qualify for the suspension of time provisions if their service is in direct support of military operations in the combat zone and they receive special pay for duty subject to hostile fire or imminent danger as certified by the Department of Defense. And finally, spouses of individuals who served in a combat zone or contingency operation are generally entitled to the same deadline extensions with some exceptions. You can find more information on the IRS website.
File For Extension
If you need more time beyond June 15, you can request an automatic extension. There’s no separate form for American taxpayers abroad, just use Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. You can also file electronically for no cost using Free File. While income limits typically apply to taxpayers using Free File to file returns, individual tax filers, regardless of income, can use IRS Free File to electronically request an automatic tax-filing extension. One more note: the IRS touts this as an automatic six-month extension, but that’s because they are counting the two-month window past April 15 as part of your extension. If you qualify for the June 15 due date and you file for an extension, your due date in 2023 is Oct. 16.
Businesses that need more time must file Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information and Other Returns. The extension allows you three additional months for partnerships and S corporations and four additional months for C corporations.
Tax Rules And Benefits
If you are a U.S. citizen or resident alien, the rules for filing income tax returns—and paying estimated tax—are generally the same whether you are physically in the country or abroad. This means that you are subject to tax on worldwide income from all sources, and as a result, you must report all taxable income and pay the appropriate taxes.
Many Americans living abroad qualify for special tax benefits. Those benefits include the foreign earned income exclusion–an exclusion of your foreign earnings up to an amount that is adjusted annually for inflation ($112,000 for the 2022 tax year)—and the foreign tax credit—a credit for foreign taxes imposed on you by a foreign country or U.S. possession so that you aren’t taxed twice on the same income—but you can only get those benefits by filing a U.S. return. That’s important—you can’t simply skip filing and assume you don’t owe tax because of the credits.
You may also qualify for other tax credits like the Child Tax Credit, Credit for Other Dependents and Credit for Child and Dependent Care Expenses. You should note that the calculation of these credits may differ depending on whether you lived in the U.S. for over half of 2022.
Information Returns
And don’t forget about the Report of Foreign Bank and Financial Accounts (FBAR). The FBAR requirement applies to anyone with an interest in, or signature or other authority over foreign financial accounts whose aggregate value exceeded $10,000 at any time during the tax year. U.S. taxpayers who own foreign financial accounts must report those accounts to the U.S. Treasury Department, even if the accounts don’t generate any taxable income. The FBAR is due April 15 following the calendar year reported. You’re allowed an automatic extension to October 15 if you fail to meet the FBAR annual due date of April 15—you don’t need to request an extension.
In addition, certain taxpayers may also have to complete and attach to their return Form 8938, Statement of Specified Foreign Financial Assets. Generally, U.S. citizens, resident aliens and certain nonresident aliens must report specified foreign financial assets on this form if the aggregate value of those assets exceeds certain thresholds. For example, if your tax home is in a foreign country, you meet one of the presence abroad tests, and no exception applies, you would file Form 8938 as an unmarried taxpayer or a married taxpayer filing separately if the total value of your specified foreign financial assets is more than $200,000 on the last day of the tax year or more than $300,000 at any time during the tax year. If you are married filing jointly, you would file Form 8938 if the value of your specified foreign financial assets is more than $400,000 on the last day of the tax year or more than $600,000 at any time during the tax year.
The FBAR and IRS Form 8938 require you to use a Dec. 31 exchange rate for all transactions, regardless of the actual exchange rate on the transaction date. Generally, the IRS accepts any posted exchange rate that is used consistently. For more information, check out the IRS website.
Expatriation
If you relinquished your U.S. citizenship or ceased to be a lawful permanent resident of the U.S. during 2022, you must file a dual-status alien tax return and attach Form 8854, Initial and Annual Expatriation Statement. For more information, check out IRS Publication 519.
Help
The rules for Americans living abroad can be tricky—and the consequences of missing a tax filing can be draconian. Help is available. If you are outside the United States, you can call the IRS at 267-941-1000—this is not a toll-free number. You can also fax 681-247-3101—yes, the IRS still uses a fax, as they do not typically communicate via email. If you wish to write, the address is Internal Revenue Service International Accounts, Philadelphia, PA 19255-0725, U.S.A.—but remember, there’s still a backlog.