The American tax deadline is looming
As much as I hate to admit, I would describe myself as a procrastinator. I have left it until now (April 10th) to figure out what I need to do as regards filing US taxes for income I earned there last year. If you're not familiar with the US tax system, the general filing date for most people is April 15th.
I spent a couple of hours reading information on TurboTax (which I use almost every year to file taxes), various tax pro websites, and on discussion boards. I finally found the clearest indication of what I need to do on a British expat discussion board.
As a US resident (or for any of you US citizens living abroad) you are automatically entitled to a 2 month extension before you are required to file your income tax return. That gives you until June 15th of the tax year to file your taxes. Important note: This does not mean that you don't have to pay up before then. If you owe US taxes, interest will start accumulating from April 15th.
In my case I need even extra time before I file. I want my Irish income to be exempt from any US taxes, and therefore need to qualify for "special tax treatment". I'm hoping I can qualify for that by meeting the bona fide residence or physical presence tests. I haven't explored this in a lot of detail yet, but I'm pretty sure if I file a year from when I left the US, I will meet one of those tests, and therefore my foreign earned income (up to a limit) will be exempt from US tax. To receive this extra time I need to submit IRS form 4868. According to UncleFed.com, as a taxpayer living outside the US, I have until June 15th to do this. Their website states "The 2-month period and the 6-month period start at the same time. You do not have to request the additional 4 months until the new due date allowed by the 2-month extension." I hope this is true, as I don't think I have time between now and April 15th to file the form. My procrastination has brought me some unnecessary worry...
For now I will not be sharing any more tax information, but as time passes, I will share my experience for filing US taxes from abroad, and what services I used (if any), and anything I learned.
3 Comments Already
Leave a Reply
You must be logged in to post a comment.
My understanding is the residence and presence tests are based on how much of the tax year you were in another country. Also you may need to file state taxes depending on how long you were in the US during 2014. Remember the taxes you file in 2015 are for the 2014 Calendar year.
So digging around the links and resources page here, it looks like some of my plans may hurt me tax wise. For example keeping a California phone number via Vonage may be used by California as proof I intend to return. Likewise if I leave behind a dependent, even college age.
David,
What are the implications of California proving you may return some day? Does that mean you continue to owe them tax?
It sound completely reasonable to me that an ex-resident of any state/country may appreciate the advances in modern technology which allows them to retain a previous phone number while abroad. I do it mostly for convenience for any one calling me. I can quite easily call the US with a variety of services, but it’s so cost effective and easy for my friends in the US to call me with a service like Vonage. Surely CA can’t expect people to erase their past.
Similarly with a college age kid staying behind. It sounds completely reasonable to me that that would happen. CA surely can’t say you may return because of your kid living there. I have 3 kids. What if they all lived in different states?
Liam