The Internal Revenue Service (IRS) recently reminded taxpayers living and working outside the United States to file their 2022 federal income tax return by Thurs., June 15. This deadline applies to both U.S. citizens and resident aliens abroad, including those with dual citizenship.  

Just as most U.S. taxpayers must timely file their returns with the IRS, those living and working in another country are also required to file. An automatic two-month deadline extension—until June 15—is normally granted for those overseas. Anyone who qualifies gets the extra time applied automatically; they don’t need to ask for it.  

Qualifying for the June 15 Extension

A taxpayer qualifies for the special June 15 filing deadline if either of these options applies:  

  • Both their tax home and abode are outside the United States or Puerto Rico  
  • They are serving in the military outside the United States and Puerto Rico on the regular due date of their tax return  

Be sure to attach a statement to the return indicating which of these two situations applies.  

File to Claim Benefits

Taxpayers must file a return, even if they qualify for tax benefits, such as the Foreign Earned Income Exclusion or the Foreign Tax Credit. These benefits are not automatic and are only available if a U.S. return is filed. This is true even if these or other tax benefits substantially reduce or eliminate U.S. tax liability.  

Additionally, the IRS urges families to look into expanded tax benefits, such as the Child Tax Credit, Credit for Other Dependents, and Child and Dependent Care Expenses, and claim them if they qualify. While taxpayers abroad often qualify, the calculation of these credits differs, depending upon whether they lived in the United States for more than half of 2022.  

Reporting Required for Foreign Accounts and Assets

Federal law requires U.S. citizens and resident aliens to report any worldwide income, such as income from foreign trusts and foreign bank and securities accounts. Most of the time, qualifying taxpayers need to complete and attach Schedule B, Interest and Ordinary Dividends to their tax return. Part III of Schedule B inquires about the existence of foreign accounts, such as bank and securities accounts, and requires U.S. citizens to disclose the country in which each account is located.  

Certain taxpayers may also have to complete and attach Form 8938, Statement of Foreign Financial Assets to their return. U.S. citizens, resident aliens and certain nonresident aliens must include specified foreign financial assets on this form if the total value of those assets exceeds specific thresholds. Reference the instructions on this form for further details.  

Additionally, specific foreign financial accounts, such as bank or brokerage accounts, must be reported by filing an electronic Form 114, Report of Foreign Bank and Financial Accounts (FBAR), with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN). This filing requirement applies to taxpayers with an interest in, or signature or other authority over foreign financial accounts whose aggregate value(s) exceeded $10,000 at any time throughout 2022. 

The IRS urges all taxpayers with foreign assets, no matter the size, to check if the FBAR filing requirement applies to them. While the deadline for filing the annual FBAR was April 15, 2023, FinCEN grants those who missed the deadline an automatic extension until Oct. 15, 2023. With a long history of aggressive FBAR non-filing penalties, even for non-willful instances, it is imperative to stay on top of these deadlines and file your FBARs timely.  

Extensions Beyond June 15

If you need extra time beyond the June 15 deadline, be sure to request a six-month extension by filing Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. The IRS urges anyone needing additional time to make their request electronically, and has several electronic options available for a more efficient process.  

Doeren Mayhew’s international tax advisors are here to assist with your filing needs. To obtain tax compliance assistance or to explore what credits are available to you, contact us today.