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Out of country

The IRS has different definitions and rules for being ‘out of the country’ on Tax Day.

By Bethany Bouw

There are a variety of ways one may be considered ‘out of the country’ on the due date of individual income tax returns (April 17, 2018). In regards to filing the automatic two-month extension, the IRS has a slightly complicated definition of ‘out of the country’. You will want to make sure that you fully understand their definition in order to know when your due date is and how best to extend.

How does the IRS define “out of the country” for purposes of the two-month extension?

  • You must have your main place of business and residency outside the US and Puerto Rico, OR
  • You must be in military or naval service on duty outside the US and Puerto Rico on the regular due date of the return.

Can I get the automatic two-month extension if I am not a US citizen or resident?

If you are not a US citizen or resident, you are not eligible for the automatic two-month extension. You should instead request the six-month extension on the Form 4868 if you require additional time to file the Form 1040NR.

What if I meet the IRS definition of “out of the country” but am actually in the US on the filing deadline day?

As long as you meet the definition of “out of the country”, you can be in the US on the due date of the return and still be eligible for the automatic two-month extension.

What if I reside in the US but I am in Europe on April 15th? Can I still qualify for the automatic two-month extension?

If you reside in the US and are simply traveling on the regular due date of the return, you are not eligible for the automatic two-month extension. You should generally request a six-month extension instead on Form 4868.

If, however, you are seeking to extend your return because you will not meet the bona fide residence test or physical presence test by the due date of your return, you should extend your return on Form 2350. This will in most cases extend your return to the date you expect to meet the tests plus 30 days. Form 2350, like the automatic two-month extension and the Form 4868 extension, is not an extension of time to pay your taxes. You should pay taxes due by the regular due date.

Who can help me with this?

Ryan & Wetmore has years of experience assisting clients with their various foreign extensions. We would be happy to assist you with any concerns about extending your return.

The International Tax Team at Ryan & Wetmore is well-versed in foreign informational filings. For questions or concerns regarding your international accounts and assets, click here to email our foreign tax team.  Please be aware that tax issues are complicated and may vary based on the details of your situation. For this reason, an initial phone call is generally required to obtain the facts and address the questions.

Bethany Bouw CPA, is a manager at Ryan & Wetmore and has been with the firm for over eight years. She has experience with offshore voluntary compliance and assisting taxpayers with foreign asset and entity reporting requirements.

Traci Getz CPA, is a partner with Ryan & Wetmore, P.C. Traci has over fifteen years of experience providing accounting, tax, and consulting services to small and medium-sized business owners. She works with clients to understand their accounting and tax issues while specializing in international tax, healthcare, and construction.

Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

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