For most U.S. citizens and resident aliens living abroad, now is a good time to be reminded that the deadline to file your 2023 tax return is June 17, 2024, including those with dual citizenship. This excludes those impacted by terrorist attacks in Israel, who have an automatic extension until Oct. 7, 2024.
Extension Options
For taxpayers abroad who cannot meet the June 17 deadline, you can automatically get an extension to file your return until Oct. 15, 2024, by filing Form 4868, Extension of Time to File U.S. Individual Income Tax Return. The additional two-month extension is for filing – you will still have to pay any taxes you may owe by June 17.
Who is considered living abroad?
Taxpayers who qualify for the June 17 extension as living abroad are those who are U.S. citizens or resident aliens, and on the regular date of their return they are either living outside the United States and Puerto Rico, with their main place of business or post of duty is also outside the United States and Puerto Rico, or they are in military or naval service on duty outside the United States and Puerto Rico.
What income do I need to report?
If you are a U.S. citizen or resident alien, you must file a U.S. tax return regardless of where you live or how much you earn. Federal law requires that you must report any worldwide income, including that from any foreign trusts, banks or securities accounts.
What assets do I need to report?
You may also need to file additional forms if you own foreign assets. For example, if you own more than $50,000 in foreign financial assets at any time during the year, you must file Form 8938, Statement of Specified Foreign Financial Assets.
Do I have to report any foreign financial accounts?
Yes. Foreign financial accounts like bank or brokerage accounts must be reported by filing Form 114, Report of Foreign Bank and Financial Accounts (FBAR) to the Treasury’s Financial Crimes Enforcement Network (FinCEN). This requirement is for anyone with foreign financial accounts with aggregate value exceeding $10,000 at any time during 2023.
What if I am an expatriate?
If you have relinquished U.S. citizenship or were no longer considered a lawful permanent U.S. resident during 2023, you are required to file a dual-status alien return, as well as attach Form 8854, Initial and Annual Expatriation Statement.
What are the penalties for not filing?
The failure-to-file penalty is 5 percent of the tax owed for each month (or part of a month) that your return is late, up to a maximum of 25 percent. There is also a penalty for failure to pay any taxes you owe by the deadline. The failure-to-pay penalty is 0.5 percent of the unpaid tax for each month (or part of a month) that the tax is late, up to a maximum of 25 percent.
For more information about filing your 2023 U.S. tax return while living abroad, contact your Windham Brannon advisor, or reach out to Brandi Samuel.
