US expats and the April tax deadline | Tom LR Griffiths
Tom LR Griffiths is a tax advisor and consultant, specialising in US expatriate tax matters
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The April tax deadline – things US expats need to know

The April tax deadline – things US expats need to know

Keeping on top of taxes is easy enough for the majority of Americans, but for US expats it’s a bit more complex. This is what you need to know about the April tax deadline.

To make it as simple as possible, Tom LR Griffiths has put together some pointers for US expats as we approach the April 2023 deadline.

Tom LR Griffiths | US expats and the tax deadline

Americans who live in the United States must file their taxes by 18 April 2023.

However, US expats get a longer deadline. This automatically implemented two-month extension takes their deadline to 15 June 2023.

Expats who need even more time can also apply for extra extensions for their tax filing, but this is not automatic. Rather, they will need to apply specifically for any further extension.

Should a US expat somehow miss their tax deadline, they can look into the amnesty program set up by the Internal Revenue Service (IRS). This gives various pathways to compliance without incurring fines.

The details of the US tax season

Unlike the UK tax system, the US tax system follows the calendar year, so from 1 January to 31 December.

This year, the IRS began accepting tax returns covering 2022 from 23 January – they call this ‘the tax season’.

Usually, the standard US tax deadline is 15 April, but this year it’s on 18 April as the first date falls on a Saturday. The US expat deadline is 15 June 2023, but it’s possible to apply for an extra extension until 16 October. In very few extreme scenarios, it’s even possible to extend until 15 December, but this is a separate request.

How do quarterly taxes work?

There are various categories of US expats and Americans living in the US who must file estimated tax payments every quarter, rather than one return per year. This applies for those who can reasonably be expected to owe more than $1,0000 when filing the return.

The kinds of people affected by this include:

  • Self-employed taxpayers.
  • Taxpayers who have significant retirement income or investment income.
  • Taxpayers who sell a major asset and receive a significant windfall.
  • Taxpayers who get income from alimony.
  • Taxpayers who get income from some form of partnership or an S corp (this is a subchapter of the Internal Revenue Code (IRC)).
  • Expats who are paid by a foreign business that doesn’t pay to the IRS on their behalf.

The deadlines for the quarterly estimated payments are:

  • 18 April 2023.
  • 15 June 2023.
  • 15 September 2023.
  • 15 January 2024.

Deadline for filing the Report of Foreign Bank and Financial Accounts (FBAR)

This needs to be filed by US taxpayers who hold foreign bank accounts that collectively exceed $10,000 at any point during the 12 months. However, this isn’t filed to the IRS and US expats don’t need to file a separate tax form.

Instead, they file this report electronically using FinCEN Form 114. This is filed directly with the Department of Treasury.

Deadline for the FATCA report

If you’re a US expat and you own financial assets outside of the US that come to a certain value, then you have to also file a FATCA report. This is the Foreign Account Tax Compliance Act (FATCA).

This is a separate form and must be attached to the income tax return form, and it follows the same deadlines as the tax return. In the same way that US expats get an automatic deadline until 15 June for their income tax, they also get this extension fr their FATCA filing.

US expats that miss their filing deadlines

Missing tax deadlines as a US expat means that you will be filing and ultimately paying your taxes too late.

This can mean penalties from the IRS. However, this is extremely dependent on individual circumstances and the chances are, there is way to mitigate any penalties.

For example, let’s take a scenario where you are a US expat and you miss your tax deadline, but you’re actually owed a refund. You probably won’t, in this case, be hit with any lite filing penalty. However, you should still ensure you file with the IRS as soon as possible – there is a three year window from the original deadline within which you can claim your refund.

Late filing penalties for US expats who owe the IRS

If you do owe taxes to the IRS, then the chances are they will impose some kind of penalty for late filing or failure to file.

Expats, however, might qualify to use the Streamlined Filing Compliance Procedures, implemented by the IRS. This essentially means that the authority will waive any fines or penalties you may otherwise have received. Think of it as an amnesty for US expats who were previously unaware of their filing responsibilities – something that is all too easy when you live in a different country that has separate tax procedures.

Even if you can’t afford to pay the taxes owed to the IRS, it’s essential that at you file at your earliest convenience. There are various payment schemes likely to be offered by the IRS to stagger payments in instalments.

You will still be hit with interest payments until the debt is fully paid to the IRS< but failure to file will end up with far more severe financial penalties.