American expats have to file US taxes the same as Americans who live in the states, reporting their worldwide income.
This is because the US taxes based on citizenship, not on residence like most other countries.
Many US expats assume that a tax treaty, paying foreign taxes, or only earning abroad prevent them from having to file US taxes, but unfortunately this isn’t the case: all Americans whose income is over $12,200 (in 2019), or just $400 self-employment income, globally, are required to file.
In fact, filing US taxes abroad is more complex than filing in the States, as expats also have to claim one or more additional IRS provisions such as the Foreign Earned Income Exclusion or the Foreign Tax Credit to reduce their US tax bill . Many expats also have to report their foreign bank accounts, investments, assets, and business interests.
Some expats have to file US state taxes from abroad, too.
In this article we’ll look at the IRS deadlines and extensions for US expats in 2020.
The first IRS deadline for expats in 2020
Those expats who do owe US tax after claiming the IRS provisions mentioned above (e.g. the Foreign Tax Credit) are required to pay by April 15th or otherwise pay interest. While relatively few expats do owe US tax after they claim one or more IRS provisions, if they’re unsure they’ll need to prepare their tax return in advance of April 15th to find out. However…
“Requesting an extension to file provides taxpayers an additional six months to prepare and file taxes. However, it does not provide additional time to pay taxes owed.” – the IRS
The second IRS deadline for expats in 2020
Americans who live abroad receive an automatic two month extension until June 15th to file their federal return. The reason for this is that many expats have to file foreign taxes first, so they can’t file their US taxes by April 15th (depending on foreign tax filing dates).
The third IRS deadline for expats in 2020
Many expats require more than a two month extension though. For example, Americans living in the UK who file UK taxes can’t start filing their UK tax return until after April 5th, so they may not have enough time to finish their UK tax filing and then their US filing by June 15th. These expats can request an additional extension of six months from April 15th just like Americans living in the US by filing Form 4868, extending their filing deadline to October 15th.
The fourth IRS deadline for expats in 2020
In some circumstances, if there are very good reasons, expats can request a further extension beyond October 15th by filing Form 2350. The IRS considers this request on a case by case basis, and often doesn’t grant this extension, so expats should file by October 15th if at all possible.
FBAR filing deadline for expats in 2020
Any American who has over $10,000 in total in foreign bank and investment accounts is required to file a Foreign Bank Account Report (FBAR) to FInCEN.
The FBAR filing deadline is currently October 15th, so most expats opt to file their FBAR at the same time as their US federal tax return.
Filing US taxes from abroad is complex, due to the additional reporting requirements for expats and also as there’s often an interaction with another tax system, or as tax treaty provisions may apply.
For these reasons, 99% of expats will benefit from seeking advice from an expat tax specialist, to avoid future run ins with the IRS and to file in their optimum short and long term interests.