IRS advises taxpayers living abroad

PHOENIX — Taxpayers abroad qualifying for an automatic two-month extension must file their 2013 federal income tax returns by June 16, according to the Internal Revenue Service.

This deadline applies to U.S. citizens and resident aliens living overseas and those serving in the military outside the U.S. on the regular April 15 due date. Eligible taxpayers get one additional day because the normal June 15 extended due date falls on Sunday this year. To use the two-month extension, taxpayers must attach a statement to their tax return explaining which of these two situations apply. Click here for more information.

Federal law requires U.S. citizens and resident aliens to report any worldwide income, including income from foreign trusts and foreign bank and securities accounts, on their federal income tax returns. Separately, U.S. persons with foreign accounts whose aggregate values exceeded $10,000 at any time during 2013 must file electronically with the Treasury Department a Financial Crimes Enforcement Network Form 114, Report of Foreign Bank and Financial Accounts.

Form 114 replaces TD F 90-22.1, the FBAR form used in the past. It is due to the Treasury Department by June 30, must be filed electronically and is only available online through the BSA E-Filing System website. This due date cannot be extended, and tax extensions do not extend the FBAR filing due date. For details on FBAR requirements, click here.

Taxpayers abroad can now use IRS Free File to prepare and electronically file their returns for free. This means both U.S. citizens and resident aliens living abroad with adjusted gross incomes of $58,000 or less can use brand-name software to prepare their returns and then e-file them for free. A second option, Free File Fillable Forms, the electronic version of IRS paper forms, has no income limit and is best suited to people who are comfortable preparing their own tax returns. To find out more about these and other electronic filing options, click here. E-file and Free File will be available until Oct. 15, 2014.

Taxpayers who cannot meet the June 16 deadline can get an automatic extension until Oct. 15, 2014. This is an extension of time to file, not an extension of time to pay. Interest, currently at the rate of 3 percent per year compounded daily, applies to any payment made after April 15, 2014. In some cases, a late payment penalty, usually 0.5 percent per month, applies to payments made after June 16, 2014.

Taxpayers abroad, regardless of income, can use Free File to request a tax filing extension. Alternatively, eligible taxpayers can download and file Form 4868, available here.

In some cases, an additional extension beyond Oct. 15 may be available. Details are in Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad.

In addition, members of the military and others serving in Afghanistan and other combat zone localities normally have until at least 180 days after they leave the combat zone to file their returns and pay any taxes due. For details, click here.

Any U.S. taxpayer in the U.S. or abroad who has tax questions can use the online IRS Tax Map and the International Tax Topic Index to get answers. These online tools assemble or group IRS forms, publications and web pages by subject and provide users with a single entry point to find tax information.

Submitted by the Internal Revenue Service

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