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  • Writer's pictureLewis Grunfeld, CPA

What US Expats Need to Know About Catching Up on Taxes

Updated: Feb 25

For American expats, navigating the US tax landscape can be just as challenging as adapting to a new culture. The obligation to file US taxes remains, regardless of where you plant your feet across the globe. Understanding the implications of late filing is crucial, as it can have significant financial and legal repercussions.

​Key Takeaways

  • US Tax Deadline for Expats: Learn about the specific deadlines that apply to US citizens living abroad.

  • Extensions for Expat Taxes: Discover how to legally extend your filing deadline.

  • Consequences of Late Filing: Understand the penalties and what you might miss out on by filing late.

  • Catching Up on Past-Due Taxes: Find out the steps to become compliant if you're behind on your taxes.

  • Non-Filing Risks: Learn about the risks associated with not filing US taxes as an expat.

Understanding the US Tax Deadline for Expats

As a US expat, you're initially granted an automatic extension to June 15 to file your taxes. If you need additional time, you can file Form 4868 by this date to extend your deadline to October 15. Moreover, in certain circumstances, you may qualify for a further extension until December 15. It's crucial to remember, though, that these extensions only apply to the filing of your tax return, not to any payments due. Taxes owed are still expected to be paid by April 15 to avoid interest and penalties.

What Happens if You File Your US Tax Return Late?

Filing late can lead to several consequences:

  • Failure to File Penalty: The IRS imposes a failure to file penalty of 5% of the unpaid taxes for each month or part of a month that a tax return is late, up to a maximum of 25%.

  • Failure to Pay Penalty: If you pay your taxes late, the IRS also charges a failure to pay penalty. This is generally 0.5% of your unpaid taxes for each month or part of a month after the due date, up to 25%. This penalty accrues until the tax is paid in full.

  • Interest on Owed Taxes: Interest accrues on unpaid taxes from April 15th.

  • Penalty for Not Paying Estimated Taxes: For those who are required to make quarterly estimated tax payments, failing to do so can result in a penalty. This can occur if you don't pay enough tax throughout the year, either through withholding or by making estimated tax payments.

  • Missed Tax Breaks: You may miss out on the opportunity to claim certain tax credits and deductions, such as the Foreign Earned Income Exclusion, which can only be claimed if the tax return is filed on time or with an extension.

How Can US Expats Catch Up on Past-Due Taxes?

The IRS offers a special amnesty program for expats who have unintentionally failed to file. This program allows for the submission of the last three years of past due tax returns along with six years of FBAR (Foreign Bank and Financial Accounts Report) without facing penalties, provided that the failure to file was non-willful.

What Happens if an Expat Doesn't File Taxes?

Not filing taxes can lead to severe penalties, including fines and potential criminal charges. The IRS can enforce collection of taxes due through various means, including levying US-based assets. It's crucial to file even if you believe you don't owe any taxes, as the requirement to file is based on your income, not your tax liability.

Take the Next Step: Resolve Your Late Tax Filing Today

Filing taxes late as a US expat can seem daunting, but it's a situation that can be remedied with the right approach. At CPAs for Expats, we specialize in turning these complex tax issues into manageable solutions. Our 4.9/5 rating on independent review platforms attests to our commitment to excellence and client satisfaction. Contact us today, and let our experts simplify your tax management process, providing peace of mind and significant savings!

Article by Lewis Grunfeld, CPA

Lewis Grunfeld, CPA, is a renowned expert in international and U.S. expat taxation, with expertise spanning over ten years. He has successfully helped thousands of expats around the world navigate complex international U.S. tax regulations, and achieve significant tax savings. His work is driven by a strongly rooted passion for assisting the expat community through a wide range of tax situations, ensuring tailored solutions for each unique situation.


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