Income tax deadline is June 15 for overseas Americans
The Internal Revenue Service reminds taxpayers living and working outside of the United States that they must file their 2021 federal income tax return by Wednesday, June 15, 2022. This deadline applies to both U.S. citizens and aliens residing abroadincluding those with dual nationality.
Just as most taxpayers in the United States must file their returns in a timely manner with the IRS, those who live and work in another country are also required to do so. An automatic extension of the deadline of two months – until June 15 – is normally granted to foreigners. Anyone who qualifies gets the extra time – they don’t have to ask for it.
File to claim benefits
A taxpayer must file, even if eligible for tax benefits, such as Exclusion of income earned abroad or the Foreign tax credit. These benefits are not automatic and are only available if a US return is filed. This is true even if these or other tax benefits significantly reduce or eliminate US tax liability.
In addition, the IRS urges families to review and review extended tax benefits, such as the Child Tax Credit, Other Dependents Credit, and Child and Dependent Care Expenses. claim if they are entitled to it. Although overseas taxpayers are often eligible, the calculation of these credits differs depending on whether they have lived in the United States for more than half of 2021. For more information, see the instructions for Annex 8812 and instructions for Form 2441.
Qualification for extension on June 15
A taxpayer is eligible for the special June 15 filing deadline if:
- Their tax domicile and residence are outside the United States or Puerto Rico, or
- They serve in the military outside of the United States and Puerto Rico on their usual tax filing due date.
Be sure to attach to the return a statement indicating which of these two situations applies.
Declaration required for accounts and assets abroad
Federal law requires U.S. citizens and resident aliens to report all worldwide income, including income from foreign trusts and foreign bank accounts and securities. In most cases, the taxpayers concerned must complete and attach Annex B on their tax return. Part III of Schedule B asks about the existence of foreign accounts, such as bank accounts and securities accounts, and generally requires U.S. citizens to declare the country in which each account is located.
In addition, some taxpayers may also have to complete and attach to their return Form 8938, Statement of Foreign Financial Assets. Generally, U.S. citizens, resident aliens, and certain nonresident aliens must report specified foreign financial assets on this form if the total value of those assets exceeds certain thresholds. See the instructions for this form for more details.
The Treasury reporting obligation also applies to foreign accounts
A special reporting obligation applies to most people who have foreign bank or financial accounts. Often referred to as an FBAR requirement, it is separate and in addition to any reporting required on Schedule B or Form 8938.
The FBAR requirement applies to anyone with an interest, signature, or other authority over foreign financial accounts whose total value exceeded $10,000 at any time in 2021. They must electronically file with the Department of Treasury a Financial Crimes Enforcement Network (FinCEN) Form 114, Foreign Bank and Financial Account Report (FBAR). Because of this threshold, the IRS encourages taxpayers with even relatively small offshore assets to check whether this filing requirement applies to them. The form is only available through the BSA Electronic Filing System website.
Tied to the tax filing deadline, the annual FBAR filing deadline was usually April 18, 2022. But FinCEN grants filers who missed the original deadline an automatic extension until October 17, 2022. It is not necessary to request this extension.
Declaration in US dollars
Any income received or deductible expenses paid in foreign currencies must be reported on a US tax return in US dollars. Similarly, any tax payments must be made in US dollars.
Both FINCEN Form 114 and IRS Form 8938 require the use of a December 31 exchange rate for all transactions, regardless of the actual exchange rate on the date of the transaction. Generally, the IRS accepts any posted exchange rate that is used consistently. For more information on exchange rates, see Foreign currencies and exchange rates.
To ensure that tax payments are credited promptly, the IRS urges taxpayers to consider the speed and convenience of paying their US tax obligations electronically. The fastest and easiest way to do this is through the online account and IRS Direct Pay. These and other electronic payment options are available at Pay online.
Taxpayers who renounced their U.S. citizenship or ceased to be lawful permanent residents of the United States in 2021 must file a dual status foreigner tax return and attach Form 8854, Initial and Annual Declaration of Expatriation. A copy of Form 8854 must also be filed with the Internal Revenue Service, 3651 S IH35 MS 4301AUSC, Austin, TX 78741, prior to the tax return (including extensions) due date. See instructions for this form and Notice 2009-85PDF, Guidance for Expatriates Under Section 877A, for more details.
Extensions beyond June 15
Additional time is available for those who cannot meet the June 15 date. The IRS urges anyone needing more time to file their application electronically. Several electronic options are available. Visit IRS.gov/extensions for more details.
Alternatively, individual taxpayers can request a filing extension until October 17 by filing Form 4868, Request for Automatic Extension of the Filing Deadline for U.S. Individual Income Tax Returns. Companies that need more time should file Form 7004, Request for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns.
Expansion of the combat zone
Soldiers are entitled to a further extension of at least 180 days file and pay taxes if any of the following apply:
- They are serving in a combat zone or they have qualifying service outside of a combat zone, or
- They serve on deployment outside of the United States away from their permanent duty station while participating in a contingency operation. It is a military operation designated by the Secretary of Defense or which results in calling members of the uniformed services to active duty (or keeping them on active duty) during a war or a national emergency declared by the President or Congress.
Deadlines are also extended for persons serving in a combat zone or contingency operation in support of the armed forces. This applies to Red Cross personnel, accredited correspondents and civilian personnel acting under the direction of the armed forces in support of those forces.
Spouses of individuals who served in a combat zone or contingency operation are generally entitled to the same time extensions, with some exceptions. Extension details and more military tax information is available in IRS Publication 3, Armed Forces Tax Guide.
Visit IRS.gov for tax information
Tax help and filing information is available anytime at IRS.gov. The IRS website offers a variety of online tools to help taxpayers answer common tax questions. For example, taxpayers can search Interactive Tax Assistant, Tax topics and Frequently Asked Questions for answers to common questions. IRS.gov/payments provides information on electronic payment options.