By Bethany Bouw
With spring showers, come tax due dates. Individual income tax returns are due April 15, 2019. For those that reside abroad, now is the time to determine if you need to request the automatic 6-month extension or if you qualify for the automatic two-month extension. Other important factors that should be considered are tax payments along with extension time frames. This article will answer some common questions related to the two-month extension.
Will I qualify for the automatic two-month extension?
You must meet one of the following two options to qualify for the two-month extension:
- Are you a US citizen or US resident taxpayer and your primary place of business and residency is outside of the US and Puerto Rico? If yes, you qualify.
- Are you in military or naval service on duty outside the US and Puerto Rico on the regular due date of the return? If yes, you qualify.
You can still extend your return using Form 4868 “Application for Automatic Extension” if you do not qualify for the automatic two-month extension and require additional time to file. Form 4868 is a request for an automatic six-month extension to file. This form is not an extension to pay, so a taxpayer should still pay by the original due date to prevent penalties and related interest.
I qualify for the two-month extension – when is my return due now?
The extended return is due on June 15, 2019 for filers who qualify and had an original due date of April 15th. The extended due date adjusts for weekends and holidays similar to the April 15th due date. The extended return will be June 17, 2019 since June 15, 2019 falls on a Saturday. If you require additional time still to file your return, you can request extra time on Form 4868 (make sure to check the box on line 8 to note that you are “out of the country”).
Does the extension give me more time to pay my tax?
The automatic two-month extension is only for filing the return. An automatic two-month extension is not an extension for payment of the tax owed. There will be no late payment penalties if you pay the tax fully by the two-month extended due date. However, you may incur interest on the taxes that are late. The best plan to eliminate or reduce your interest expense is to pay all of the estimated tax amount by the regular un-extended due date.
What do I need to do to claim the extension?
Include a statement that explains the qualifications and reason for the extension when you file the return. The tax preparer will be able to put the appropriate language in your return to document your extension. Failure to include the statement in the tax return could result in tax notices and assessment of penalties and interest.
The International Tax Team at Ryan & Wetmore is well-experienced in additional extensions for those abroad. For questions or concerns regarding your international requirements, accounts, entities, 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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