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FILING AFTER THE OCTOBER 15 DEADLINE

September 21, 2015

By Ephraim Moss, Esq. & Joshua Ashman, CPA

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THE OCTOBER 15TH TAX FILING EXTENSION DEADLINE IS JUST AROUND THE CORNER

If you are an American living abroad, you may have taken advantage of the automatic 6-month tax filing extension by filing Form 4868 by the original due date of your return (April or June15).  If so, now is the time to get moving on your tax return filing. October 15 is just around the corner!

FILING AFTER THE OCTOBER 15 DEADLINE

Filing after the October 15 deadline can have a number of adverse and irreversible effects, including:

  • Failure-to-file penalty – calculated as 5% of the taxes owed for each month outstanding (capped at 25% of the total tax liability).
  • Forfeiture of tax elections – A number of important elections must be made by the due date of the tax return (including extensions) or they may be lost. Examples include the Section 911 foreign earned income inclusion and the Section 1296 election to mark-to-market PFIC Stock.

For those of you who have successfully completed an IRS delinquency amnesty program (e.g., OVDP or the Streamlined Procedures), filing by the October 15 extension deadline is particularly important, because the IRS is most likely going to pay special attention to your file to ensure you stay on track from now on. The IRS will be looking to see that you have filed your tax return and all information returns (e.g., Form 5471, 3520) on time.

Besides being the automatic extension deadline for U.S. expats, October 15 is also a significant date on the tax calendar for other reasons as well:

  • October 15 is the last day the IRS will accept an electronically filed tax return using its “Free File” software. If you file after October 15th and mail in your tax return to claim a refund, this could significantly delay the process.
  • October 15 is the final deadline to fund a qualified retirement account, such as an IRA. In this regard, your tax return must be completed in order to finalize certain tax information that is necessary for determining your contribution limitation.

The Expat Tax Professionals have decades of combined experience in preparing U.S. tax returns for Americans living abroad. Our dedicated team can assist with preparing your tax return and other required filings so that you can meet the October 15th deadline.

If it turns out that October 15 does not provide sufficient time to prepare your tax return this year, all is not lost. Under the right circumstances, we can help you secure a further extension to December 15th. While a further extension will not automatically be granted, our experience has been that the IRS will provide the extra time if a reasonable explanation for the delay is provided.

It is best, of course, to try to avoid this type of situation and instead prepare your tax return in good time. Contact an Expat Tax Professional today and we will get the process started immediately.

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