Answers In a Hurry
Here are the answers in a hurry:
When You Must File Your Income Tax Return
- April 15. If your “tax home” or “abode” is in the United States, your filing deadline is April 15. This is the default rule.
- June 15. If your “tax home” or “abode” is outside the United States, your deadline for filing your income tax return is June 15. This is automatic and you do not need to do anything to get it.
- October 15. Anyone can file Form 4868 to make extend the filing deadline to October 15. File before April 15 or June 15 (whichever applies to you).
- December 15. Americans whose tax home or abode is outside the United States can get a further extension of time to file their tax returns–to December 15.
- Very Long Extension (You Choose the Date). For people who need time in order to qualify for the foreign earned income exclusion, Form 2350 allows you to select your own filing deadline to achieve that goal.
When You Must File FinCen Form 114
- October 15. Technically the deadline is earlier, but you get an automatic extension to October 15–without asking for it and without doing anything.
When You Must Pay Your Tax Bill
- April 15. The tax due on your tax return is payable on or before April 15.
- June 15. If you qualify for the June 15 extended deadline to file your tax return, you can pay your tax–without late payment penalties–on or before June 15. However, you will owe interest on the tax due, from April 15 until the day you pay the tax. No further extension of the payment due date is possible.
Income Tax Return Filing Deadlines Explained
The income tax return filing deadlines are not too difficult to understand–if you ignore the confusing instructions for Form 4868.
April 15: The Basic Rule
The basic rule is that you must file your income tax return on or before April 15.1
In tax law, there are exceptions to every rule. Let’s talk about the exceptions to the April 15 income tax return filing deadline.
June 15: Who Gets This Filing Deadline?
For some Americans abroad, the IRS has given an automatic extension of time to file your income tax return–to June 15. You don’t have to ask for it, you just have it.
An extension of time for filing returns of income and for paying any tax shown on the return is hereby granted to and including the fifteenth day of the sixth month following the close of the taxable year in the case of . . . United States citizens or residents whose tax homes and abodes, in a real and substantial sense, are outside the United States and Puerto Rico[.]2
In other words, if you are a U.S. citizen or resident alien, and your “tax home” and “abode” is outside the United States and Puerto Rico, then your income tax return filing deadline is June 15.
October 15: How to Get This Filing Deadline
You can get an extension of time until October 15, using the traditional method of filing Form 4868.3
You must file Form 4868 in a timely manner. This means you must file it before April 15 (if your tax home and abode is in the United States) or before June 15 (if your tax home and abode is outside the United States.)
Note that this is a little bit confusing. For an American living abroad (tax home and abode is outside the United States), there is an automatic extension from April 15 to June 15, and the normal six month extension (using Form 4868). Does this mean that the six month extension starts on June 15 and expires on December 15? No.
Both extensions start on April 15. For April 15 through June 15, both extensions apply to an American living abroad. They are like concurrent prison sentences, to use an unfortunate comparison.
On June 15, the automatic extension expires. But the Form 4868 extension continues on for another four month, expiring on October 15.
December 15: Americans Abroad Only
If an extension to October 15 is not enough time for you to prepare and file your income tax return, you can apply for and receive one more extension of time–to December 15.
This is done by sending a letter to the IRS.4
Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad (2016) (PDF), at page 4, gives you the rules:
[T]axpayers who are out of the country can request a discretionary 2-month additional extension of time to file their returns (to December 15 for calendar year taxpayers). To request this extension, you must send the Internal Revenue Service a letter explaining the reasons why you need the additional 2 months. Send the letter by the extended due date (October 15 for calendar year taxpayers) to the following address:
Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0045
You will not receive any notification from the Internal Revenue Service unless your request is denied.
The discretionary 2-month additional extension is not available to taxpayers who have an approved extension of time to file on Form 2350[.]
The problem for you lies in the meaning of that phrase “out of the country”. The actual language of the Regulations (authorizing this discretionary extension of time) is that the taxpayer must be “abroad”.5 What does this mean? Surely it does not mean that you are on a short tourist jaunt outside the United States.
We get a clue as to the meaning of “out of the country” from the Form 4868 Instructions, where the phrase “out of the country” is defined as living abroad:
You’re out of the country if:
- You live outside the United States and Puerto Rico and your main place of work is outside the United States and Puerto Rico[.]
Curiously, you can be physically inside the United States and be “out of the country” at the same time. The Form 4868 Instructions say:
If you qualify as being out of the country, you’ll still be eligible for the extension even if you’re physically present in the United States or Puerto Rico on the regular due date of the return.
In other words, “out of the country” has nothing to do with where you are. It means where you live.
The technical words that describe where you live are “tax home” and “abode”.6
So, although Publication 54 and the Form 4868 Instructions (ahem) lack clarity, I believe the people who are entitled to claim the additional extension of time to December 15 are people whose tax homes and abodes are outside the United States–not people who physically happen to be inside or outside the United States on a particular day.
Form 2350: Long Extension For Foreign Earned Income Exclusion Purposes
An entirely different extension system applies for Americans abroad who have not yet qualified for the foreign earned income exclusion (see Form 2555) but expect to.
Form 2350 allows an American abroad to select a filing deadline far enough in the future so that they will either qualify for the physical presence test (330 days or more in a 12 months period are spent outside the United States) or for the bona fide residence test (a full calendar years elapses where the taxpayer is a bona fide resident of a foreign country).
I suggest picking a date that is a month after you expect the qualification for the physical presence test or the bona fide residence test.
You must file Form 2350 by either April 15 or June 15–whatever applies to you.
FinCen Form 114
The dreaded FBAR form.
The filing deadline, as a practical matter, is October 15.
The technically correct statement of the filing deadline is that it is the same filing deadline as your income tax return. However, the Federal government agency, in a remarkably sane “keep it simple” move, says that everyone can have an automatic extension to October 15, without even asking for it:
The new annual due date for filing Reports of Foreign Bank and Financial Accounts (FBAR) for foreign financial accounts is April 15. This date change was mandated by the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, Public Law 114-41 (the Act). Specifically, section 2006(b)(11) of the Act changes the FBAR due date to April 15 to coincide with the Federal income tax filing season. The Act also mandates a maximum six month extension of the filing deadline. To implement the statute with minimal burden to the public and FinCEN, FinCEN will grant filers failing to meet the FBAR annual due date of April 15 an automatic extension to October 15 each year. Accordingly, specific requests for this extension are not required. (Please note: The due date for FBAR filings for foreign financial accounts maintained during calendar year 2016 is April 18, 2017, consistent with the Federal income tax due date.7
Important. This is a different Federal agency, imposing filing deadlines under a different set of laws from the Internal Revenue Code. The filing deadline for the FBAR is set to the default tax filing deadline for an income tax return. There is a single six month extension allowed, and it starts from April 15 and takes you out to October 15. The “June 15” and “December 15” filing deadline wrinkles for an income tax return are not relevant for the FinCen Form 114.
Tax Payment Deadlines
The government encourages you to pay your tax promptly by imposing penalties and interest if you do not.
What is the deadline for paying that tax if you are an American abroad?
Payment Deadline: April 15 Unless the IRS Says Otherwise
The general rules is that tax payment is due at the time that is set for the filing deadline, not counting any extensions you might get.8 Since the filing deadline is April 15, this is the default payment deadline.
Therefore, the default payment due date is always April 15, unless you find an explicit rule that gives you extra time to pay your tax.
IRS Says June 15 for Some People
The IRS has extended the time for payment9 for certain U.S. citizens and residents abroad:
An extension of time for filing returns of income and for paying any tax shown on the return is hereby granted to and including the fifteenth day of the sixth month following the close of the taxable year in the case of:
(5) United States citizens or residents whose tax homes and abodes, in a real and substantial sense, are outside the United States and Puerto Rico; and
(6) United States citizens and residents in military or naval service on duty, including non-permanent or short term duty, outside the United States and Puerto Rico.10
As a result, these people can defer payment until June 15 for the tax shown on your return, and will not be treated as paying their tax late.
You Will Owe Interest From April 15 to June 15
However, you will owe interest on the tax due on the return. The interest will run from April 15 (the normal due date) until you pay the tax.
This is an underpayment of tax. An underpayment exists when the taxpayer does not pay a tax on or before the last day prescribed for payment:
If any amount of tax imposed by this title (whether required to be shown on a return, or to be paid by stamp or by some other method) is not paid on or before the last date prescribed for payment, interest on such amount at the underpayment rate established under section 6621 shall be paid for the period from such last date to the date paid.11
The “last date prescribed for payment” is a defined term. It is the due date as it should be, without taking extensions into account:
The last date prescribed for payment shall be determined without regard to any extension of time for payment or any installment agreement entered into under section 6159.12
The additional two months for filing and payment (from April 15 to June 15) is an extension granted to taxpayers by an exercise of discretionary power by the IRS.13
Therefore, when determining the application of the “interest payable on underpayments of tax due” rules, we ignore that two month stub of time, and compute interest on any tax due starting with April 15.
No Late Payment Penalties If You Pay by June 15
You will not owe late payment penalties if you pay the tax on June 15 rather than April 15.
The penalty for not paying the tax shown on your tax return is imposed by IRC § 6651(a)(2):
In case of failure . . . to pay the amount shown as tax on any return specified in paragraph (1) on or before the date prescribed for payment of such tax (determined with regard to any extension of time for payment), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount shown as tax on such return 0.5 percent of the amount of such tax if the failure is for not more than 1 month, with an additional 0.5 percent for each additional month or fraction thereof during which such failure continues, not exceeding 25 percent in the aggregate[.]
The relevant language is that magic phrase “on or before the date prescribed for payment of such tax”.
Since the IRS has “prescribed the date for payment” to be June 15 (see T. Reg. § 1.6081-5, as authorized by IRC § 6161(a)(1)), the penalties for late payment will start on June 15, rather than April 15.
- IRC § 6072(a). ↩
- T. Reg. § 1.6081-5(a)(5), as authorized by IRC § 6081(a). ↩
- Congress gave the IRS power to extend the filing deadline for income tax returns. IRC § 6081(a). ↩
- T. Reg. § 1.6081-1(b)(1). ↩
- T. Reg. § 1.6081-1(a)(1). ↩
- T. Reg. § 1.6081-5(a)(5). ↩
- https://www.fincen.gov/sites/default/files/shared/FBARDueDateAnnouncement12-16-16.pdf. ↩
- IRC § 6151(a). ↩
- T. Reg. § 1.6081-1(a)(1). Emphasis added. ↩
- Authorized by IRC § 6161(a)(1). ↩
- IRC § 6601(a). ↩
- IRC § 6601(b)(1). ↩
- T. Reg. § 1.6081-5(a). ↩