If you are a US expat who filed an extension to submit your 2014 US tax return, here is a gentle reminder that 15th October, the six month extension deadline, is right around the corner.
Hopefully, by this point, your taxes are near completion and simply awaiting postage, but for those of you still finalising your tax return, here are a few simple reminders to help you along.....
The 6-month extension applies to filing your taxes, not paying them
15th April is tax day for Americans. This means that even if you requested an extension to prepare and file your taxes, any taxes owed for the 2014 tax year were still due to be paid by 15th April 2015. Unfortunately this means that if you do have tax to pay this will be subject to late fees, penalties, and interest. The late payment penalty is 0.5% of the total tax owed for every month the owed tax remains unpaid, up to a maximum of 25%.
If you are expecting a tax rebate instead of owing taxes, you will not be subject to any penalties and have up until April 15th 2018 to file in order to collect your return.
Missing the 15th October deadline
15th October is your last chance to file. If you miss the extension deadline, the IRS will give you a failure-to-file notice. This again will include heavy fines of up to 25% of your tax bill therefore it is crucial you file by 15th October.
you may get a second chance....
As mentioned above, the IRS does not allow extensions beyond 15th October. However as a US expat you can request a discretionary additional two month extension until 15th December.In order to benefit the request must be made to the IRS by 15th October and include the reasons why you need a further extension to file.
You will be notified by the IRS only if your request has been denied. However, there is no guarantee your request will be approved so it is best to file as early as possible.
Pay whatever taxes you can
If by 15th October you cannot pay any taxes you owe, pay whatever you can to avoid the consequential payments.
In addition, if you owe less than $50,000, you can also set up a monthly installment payment plan with the IRS to pay your taxes over a longer period of time.