I’m a U.S. citizen living and working outside of the United States. Do I still need to file a U.S. tax return?
Yes, if you are a U.S. citizen or a resident alien living outside the United States, your worldwide income is subject to U.S. income tax, regardless of where you live.
What is the due date of a U.S. income tax return?
April 15th is the tax filing due date for individual tax returns. You can file an extension request by the due date of your return to extend the deadline to October 15th.
Special conditions apply if you are a U.S. resident currently living outside of the United States, out of the country when your six-month extension expires, or serving in a combat zone.
I haven’t filed tax returns for the last three years. What should I do?
Taxpayers should file all tax returns that are due, regardless of whether full payment can be made with the return. If you owe money, you should send your payment with each tax return.
The IRS will bill you for interest and penalties. If you are due a refund, there will be no interest or penalties for that tax year. Please note that there is a statute of limitation for obtaining a refund.
You have the later of (a) three years from the due date of the return or (b) two years from the date you paid the taxes to file for a refund.
How does the U.S. Internal Revenue Service (IRS) calculate interest and penalties?
Generally, interest is charged on any unpaid tax from the due date of the return (without extensions) until the date of payment.
Do I have to pay taxes on money that was gifted to me?
No. The federal tax laws do not consider gifted money to be earned income therefore it is not taxable to you. No state has a tax law on gifted money either.
Do I need to file quarterly individual estimated tax payments?
You must make estimated tax payments for the current tax year if both of the following apply:
You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.
You expect your withholding and credits to be less than the smaller of:
90 percent of the tax to be shown on your current year's tax return, or 100 percent of the tax shown on your prior year's tax return. There are special rules for certain small-business taxpayers, certain taxpayers with higher adjusted gross income, farmers and commercial fishermen, aliens, estates and trusts.
Do I need to report my foreign assets?
If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, the Bank Secrecy Act may require you to report the account yearly to the U.S. Internal Revenue Service (IRS) by filing FinCEN Report 114, Report of Foreign Bank and Financial Accounts (“FBAR”).
In addition, U.S. citizens and residents with specified foreign financial assets with an aggregate value exceeding $50,000 must report them to the IRS on Form 8938, Statement of Specified Foreign Financial Assets, attached to their federal income tax return.