The Timeline for US Expats to File Income Tax
Just as any other citizen of USA, expats living and working in a foreign country are subjected to income tax laws. While there are some rules that differ from the tax laws applicable to residents of USA, expats have to pay income tax in the same spirit as the others. Income tax is applicable to all earning that USA citizens incur across the globe. If the earnings are in a foreign currency, the exchange rate of the day applies to convert its value into American dollars and then subjected to income tax.
Let us take you through the timeline of filing income tax for expats. The rules regarding this are filed under the section of Expatriate Tax Return. All your earnings will be subjected to Expatriate Tax preparation. There are points of difference in the timeline. Expats get an automatic extension of two months, up to June 15th. You need not put in a request for this extension. It is there for the taking as a privilege extended to expats.
Additionally, there is no penalty for this extension offered to you. The catch is that you will have to declare the additional interest you earn during these 2 months. For some expats, these 2 months are not sufficient due to whatever reason. If you need another extension to pay your taxes, then you need to file a request. The extension awarded to you will be for 4 more months. So, you have the extension till October 15th.
This extra 4 months will bring a penalty for you. Moreover, you need to pay an interest on the time you take extra from the 15th of June. In other words, if you pay your taxes by 15th of August, you will have to pay an interest for the additional 2 months. The penalty you have to pay will also be on these 2 months of additional time.
As for expats who earn in foreign exchange, like it was mentioned earlier, you need to convert them into US dollars. If you have earned them at a time when the exchange rate was different, you are allowed to convert according to that rate. As an expat, you can send over your tax returns to the Department of Treasury and mail a copy to the Internal Revenue Services Department.
If you are unsure about what to do as an expat about the question of taxes, get in touch with theaccountingandtax.com.
The Accounting and Tax