Extend the Fun!

We're talking taxes here, so that might be misleading

It’s never too late to talk about extensions: what they are, how to get them.  They can be a good thing except when they just help to procrastinate.

If on the due date of the return you are residing outside the U.S. (and Puerto Rico) and your main place of business or post of duty is likewise outside the U.S./P.R., you are then entitled to an automatic 2-month extension of time to file and pay a federal income tax return.  If your return is filed within the extension period, there will be no failure to file or failure to pay penalties imposed.  Interest on any unpaid tax will run from the due date.  The two-month clock starts from the original due date of the return, April 15, until Friday, June 15.

You must attach a statement to the return saying that you are eligible for the automatic extension because you are an overseas resident.  If you reside overseas you qualify, even if that day you happen to be physically in the U.S.

Two other types of extensions:  Form 4868 grants expats four extra months to file but not to pay (beyond the first two months I mentioned earlier).  Regular U.S. dwellers use this form to get an extra six months to file their returns, but not to pay.

Form 2350 can grant additional time to file (but not to pay), in order to meet tests to qualify for the foreign earned income exclusion.

For those of you required to file Foreign Bank Account Reports:  Those were due on the due date of the federal return with an automatic 6-month extension to Oct. 15. No form is required to get the FBAR extension.

In the case of paper filings, the return is deemed filed/tax paid on the date of the postmark (not a private meter). Even a foreign postal service postmark counts.  If you use private services like FedEx, DHL or UPS, only some of their services meet the “timely mailing as timely filing/paying” rule for tax returns and payments. Make sure your type of service is approved! Otherwise, it’s treated as filed/paid when actually received.

Finally: states vary in their extension rules.  Don’t forget to double-check those too!

Orlando Gotay is a California licensed tax attorney (with a Master of Laws in Taxation) admitted to practice before the IRS, the U.S. Tax Court and other taxing agencies.  His love of things Mexican has led him to devote part of his practice to federal and state tax matters of U.S. expats in Mexico.  He can be reached at tax@orlandogotay.com or Facebook: GotayTaxLawyer.  This is just the most general outline. It is informational only and not meant as legal advice.