This article has been written exclusively for Expat Network by Greenback Expat Tax Services
Get Caught Up Penalty-Free
The IRS has amnesty programs to help late filers come forward voluntarily and become tax compliant. If the reason an expat has not filed is non-willful (i.e., the expat was unaware of the requirement), the Streamlined Filing Procedures can be utilized. Streamlined Filing Procedures are the preferred filing method, as expats will not incur penalties. To submit, expats must file three years of Federal Tax Returns, six years of FBARs (Foreign Bank Account Reports), and a signed statement: Form 14653, certifying that the expat meets eligibility requirements, all FBARs have been filed, and the failure to file was non-willful.
In the rare event that the failure to file was willful, expats can use the Offshore Voluntary Disclosure Program. This program allows expats who have been hiding assets in foreign bank accounts to come forward with the assurance that they will not face criminal prosecution. The IRS recently announced that this program will end on September 28, 2018, so expats who plan to use this option should come forward now!
You Still Have Time to Meet the June Deadline
Though the April tax deadline has passed, expats receive an automatic extension to file until June 15th! However, interest on any taxes owed starts accruing as of the April deadline, so filing as soon as possible is always the best option.
A great way to prepare to meet the deadline is to begin organizing the documents you will need to file. Expats should also examine whether or not they meet the thresholds that trigger FBAR and FATCA (Foreign Account Tax Compliance Act) filing requirements.
For instance, expats who have foreign bank accounts with a combined total of $10,000 will need to file FBAR. The FATCA requirement is fulfilled through Form 8938, and unmarried expats must file if the total value of their assets is more than $200,000 on the last day of the tax year or more than $300,000 at any time during the year. Married expats must file if the total value of their assets is more than $400,000 on the last day of the tax year or more than $600,000 at any time during the year.
Important Tip on State Taxes
Don’t forget: depending on the state in which you previously resided, you may also need to file a state tax return. Each state has individual requirements, and some states are more difficult than others in their tax resident determinations.
If you’d like to meet the June deadline or need help with other tax services, Greenback Expat Tax Services specializes in helping expats get caught up and stay compliant. Greenback accountants are experts at finding every possible deduction and exclusion so that you don’t overpay and at making the process hassle-free. Greenback’s spectrum of expertise covers tax planning, tax preparation, reporting, filing, and consultations – all with flat-rate pricing, so there are no surprises on your bill! Contact Greenback today to get caught up by the June deadline!