Hi everyone, I’m Bette Hochberger, CPA, CGMA. Tax season is here, so U.S. citizens living and working abroad face a critical deadline for filing their 2023 federal income tax returns. 

The Internal Revenue Service (IRS) has issued a reminder, emphasizing the importance of adhering to the June 17, 2024 deadline for those residing outside the United States. Here’s what you need to know to ensure compliance and maximize your tax benefits!

June 17 Deadline: Who’s Affected?

The June 17 deadline applies to U.S. citizens and resident aliens living abroad, including those with dual citizenship. If you’re residing outside the U.S. or serving in the military overseas, mark your calendars for this important date. 

However, certain individuals impacted by terrorist attacks in Israel, Gaza, or the West Bank, are granted an extension until October 7, 2024, to both file and pay most taxes due. For detailed information, refer to Notice 2023-71 from the IRS.

Extensions and Qualifications

Taxpayers unable to meet the June deadline can request a further extension to file, although without an extension for payment, until October 15. Qualifying for the June 17 extension is straightforward. 

If you’re a U.S. citizen or resident alien living abroad or serving in the military overseas on the regular due date of your return, you’re automatically granted a 2-month extension. Make sure you attach a statement to your return indicating your situation.

Maximizing Tax Benefits

Living abroad doesn’t exempt you from claiming essential tax benefits. Many citizens living abroad qualify for benefits like the foreign earned income exclusion and the Foreign Tax Credit, but these are only accessible if you file a U.S. return. Additionally, explore expanded tax benefits such as the Child Tax Credit and Credit for Other Dependents, ensuring you claim what you’re entitled to.

Reporting Foreign Accounts and Assets

U.S. citizens and resident aliens are required to report worldwide income, including foreign financial accounts and assets. This may involve completing and attaching various forms like Schedule B and Form 8938. Ensure compliance with reporting requirements to avoid penalties.

FBAR Filing Requirement

Certain foreign financial accounts exceeding $10,000 must be reported by electronically filing Form 114 (FBAR) with the Treasury Department. The deadline for FBAR filing is April 15, 2024, with an automatic extension until October 15, 2024, for those who missed the initial deadline.

Payment and Currency Reporting

All income received or deductible expenses paid in foreign currency must be reported in U.S. dollars. Utilize electronic payment options provided by the IRS for prompt and convenient tax payments.

Special Considerations for Expatriates

Taxpayers who relinquished their U.S. citizenship or ceased to be lawful permanent residents during 2023 must file a dual-status alien tax return and attach Form 8854.

Extensions and Military Personnel

Military personnel stationed abroad or in combat zones during tax season may qualify for additional extensions. Spouses of individuals serving in combat zones also have extension privileges. Detailed information is available in IRS Publication 3.

Navigating U.S. tax obligations while living abroad requires attention to deadlines, compliance with reporting requirements, and a thorough understanding of available tax benefits. By staying informed and proactive, taxpayers can fulfill their obligations and optimize their tax situations. For specific inquiries or assistance, consult with a tax professional such as myself or visit the IRS website for comprehensive guidance.

As always, stay safe, and I will see you next time!