It’s been a complicated year.
Most of us have had huge disruptions in our lives.
To ease reconciling the chaos into a flawless tax form submission, the IRS recently announced that it will be extending the tax return deadline for US citizens from April 15th to May 17th.
This applies to individual filers, including anyone who is self-employed. It also means that if you are late in filing, penalties and interest will only apply and start accruing after the May 17th deadline.
The date is automatically applied so you do not have to file Form 4868 to get the extension. If you feel you will still need more time to file, you can fill out Form 4868 which gives taxpayers until October 15th to file. Be aware though that the form does not apply to the payment of taxes that are due for 2020 or any previous years. Any federal income taxes that remain unpaid past May 17th will begin accruing interest and penalties.
The final date for expats to turn in their taxes is still June 15th. If you need some direction on how to file taxes as an expat, you can check out our Ultimate Guide for US Tax Deadlines for Expats. It’s a great place to start, but like many things when you go overseas, I strongly recommend getting some professional help since the US tax system is anything but simple, and going overseas only makes it more complicated.
If you’re an expat and you feel like you need longer than June 15th, you can also request a further extension to October 15th by filling out Form 4868. But as mentioned before, it’s important to still pay any taxes that you owe by May 17th to avoid any interest charges and penalties.
There are several things to which the postponement does not apply and are still due on April 15th:
- Corporate tax returns for 2020 — note that you need to have your documents in by March 26 to be able to file before the April 15th deadline
- Foreign-owned business tax filings for 2020
- Any other type of federal tax or federal information returns for 2020
- State tax returns — you’ll need to check with your individual state to see if there are any extensions. Some states like Texas, Oklahoma, and Louisiana have already postponed their state tax deadlines to June 15 due to winter storm disaster relief
- Estimated income tax payments for the first installment of the 2021 tax year — most taxpayers have taxes withheld from their paychecks, but many pay taxes quarterly on things such as income from self-employment, interest, dividends, alimony, or rental income — these are still due April 15th.
Even with the extension, the IRS still recommends getting your taxes submitted as quickly as possible, especially those who are due a refund. They have put out information for taxpayers who received unemployment benefits in 2020 with a worksheet for figuring out how the compensation affects your taxes. More help and information should be coming in the next few days for other complicated parts of taxation for 2020.
Some have noted that the extension might not be as helpful as it seems since it still requires payment of taxes and the tax return work must be done in order to calculate the payment. Many worry it will just create more confusion and bureaucracy.
Jovana is our lead R&D Associate at Nomad Capitalist. Her full-time job is to scour our global network to identify new banking, immigration, and lifestyle options for our clients.
Source: https://nomadcapitalist.com/2021/03/24/us-tax-deadline-extensions/