IRS Warns Millions of Taxpayers: Over eight million US citizens and green card holders live abroad, but only a fraction file tax returns with the IRS each year, around $500,000, in order to fulfill their tax obligations.
Can you tell me who falls into this category of taxpayers?
In order to determine whether someone qualifies as a US taxpayer abroad, the IRS uses the physical presence test.
As an important aspect of this test, it does not require that the 330 days be consecutive; the tax authority is only looking for individuals who have spent that amount of time outside of the country over a year.
Is passing the test going to harm my career?
IRS reports that the test is not intended to track taxpayers abroad, and it “doesn’t depend on where you live, whether you plan to return or what purpose you have for staying abroad.”
Extensions have been granted automatically
US citizens living abroad are not exempt from filing with the IRS, contrary to popular belief. Failure to file can lead to penalties and other legal consequences.
We have some good news if you are a U.S. citizen, resident alien, or on duty in the military outside the U.S. You may be allowed a two-month extension to file your return. Check out all the details at the link below!https://t.co/04rJwDDGNv pic.twitter.com/y4dTDfiIN9
— TravelTax, LLC (@traveltax) May 29, 2024
There is an automatic extension of two months each year for this group. This year, the deadline for filing was extended to 17 June, leaving less than a month to file.
By submitting this Form to the IRS, taxpayers living outside the US can still request an extension through 15 October 2024.
In general, US citizens or residents who live or travel outside the United States are required to file income tax returns, estate tax returns, and gift tax returns, and to pay estimated taxes.
Is it possible to deduct foreign income from US taxes?
Foreign-earned income, i.e. income not derived from a US employer, may be taxed differently than earnings in the US. For example, many living abroad may have foreign-earned income.
For the tax year [insert year], the IRS would tax up to $120,000 ($240,000 for married couples who file jointly and both report foreign-earned income) from this type of income.
Your foreign-earned income may not be subject to US taxes if it falls below this threshold. However, the IRS still requires you to report it.
Also Read: Time is Ticking to Apply for $1 Billion in Unclaimed Stimulus Checks and IRS Credits
