Search This Blog

April 18, 2017

US Tax Extension Deadlines




Who Needs to File a US tax Return?
Not everyone is required to file a tax return. The requirement to file depends on a person’s income, filing status, age and whether they can be claimed as a dependent on someone else’s return.  Even if you live and work abroad you must file a US tax return even though you earn nothing in the USA. Anyone not sure whether they need to file a return should see Do I Need to File a Tax Return or refer to Publication 17,   If you are an expatriate read publication 54. Your Federal Income Tax for Individuals,on IRS.gov.

Extensions of Time to File
Taxpayers who are not ready to file by the deadline should request an extension of time to file. The deadline for thos living in the US is April 18 and if you live and work abroad June  15th. An extension using form 4868 gives the taxpayer until Oct. 16 to file but does not extend the time to pay. Penalties and interest will be charged on all taxes not paid by the April 18 filing deadline (and this includes expatriates even though their return is not due until June 15th.

Expatriates can by letter secure an additional extension after applying for a regular extension until December 15th. They can also extend beyond that time using IRS form 2350     if they need additional time to qualify for the foreign earned income exclusion physical presence test.


IRS will automatically process an extension of time to file when taxpayers select Form 4868 and they are making a full or partial federal tax payment using IRS Direct Pay, the Electronic Federal Tax Payment System or by paying with a credit or debit card by the April due date. There is no need to file a separate Form 4868 extension request when making an electronic payment and indicating it is for an extension.
Taxpayers also can complete and mail in Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, to get a six-month extension.

Taxpayers Who Can’t Pay
Taxpayers should file by the deadline, even if they can’t pay, or pay as much as possible and ask the IRS about payment options. By filing a tax return, even without full payment, taxpayers will avoid the failure-to-file penalty. This penalty is assessed when the required return is not filed by the due date or extended due date if an extension is requested.

The failure-to-file penalty is generally 5 percent per month and can be as much of 25 percent of the unpaid tax. The penalty for returns filed more than 60 days late can be $205 or 100 percent of the unpaid tax.

The failure-to-pay penalty, which is the penalty for any taxes not paid by the deadline, is ½ of 1 percent of the unpaid taxes per month and can be up to 25 percent of the unpaid amount. Taxpayers must also pay interest on taxes not paid by the filing deadline.


No comments: