What are my US tax deadlines this year?
18 April is the big tax deadline for US taxpayers, but there are other crucial dates that Americans at home and overseas need to observe
For some Americans, the word “April” means April Fool’s Day, “showers that bring May flowers”, Jazz Appreciation Month and even, apparently, Mathematics and Statistics Awareness Month. But for many others, “April” means just one thing: it’s the month when income taxes are due.
In the run up to filing day millions of Americans begin the grim-but-necessary business of pulling together the myriad documents they require to file their returns for the previous calendar year. This burden falls equally upon Americans living overseas, even if they are legally resident in another country and have dual citizenship.
Meanwhile, “US persons” who have accounts with non-US institutions also need to file their annual Foreign Bank Account Reports (FBARs).
This is a task that some were not aware of until fairly recently. Nevertheless, it is an important one as the financial penalties for not filing FBARs can be significant.
FBARs are required for any foreign accounts in which the balance has exceeded $10,000 during the year. If the aggregate total in all accounts exceeds $10,000, all foreign accounts are reportable, even those with zero balances.
It is important to remember that the IRS is interested in the maximum amount held in these accounts, even if it was in the account for no more than a day.
Find more detailed information about FBARs and filing requirements.
18 April: Individual Federal Income Tax return due date
For resident US taxpayers, the deadline for filing tax returns is usually 15 April. However, this year it is 18 April as the IRS' District of Columbia offices are closed on April 15 in observance of the locally recognised Emancipation Day.
Americans living overseas have a bit more time to play with. For expats, the deadline is two months later. For 2022, the deadline is 18 June.
However, it is important to remember that expats who owe Uncle Sam any tax for 2021 are required to pay the tax they owe by 18 April. If they don’t, they will begin to accrue interest on the amount they owe on that date.
US residents who need more time to complete their returns may apply for an extension using form 4868, which gives them an extra six months. Expats can apply for a four-month extension, giving them until 18 October.
18 April is also the deadline for filing 2021 FBAR forms (although an automatic extension is available, pushing the deadline back to 17 October).
It is also the date by which individuals are expected to pay the first quarter of their 2022 Estimated Income Tax payment, for those who choose to pay their taxes this way.
Other key tax dates in 2022
18 April may be the best-known date in the American tax calendar, but it’s not the only one. Also applying this year:
15 June 2022: As mentioned above, this is the 2022 deadline for American resident abroad to file their 2021 Individual Federal Income Tax returns.
Expats can apply for an additional four months to complete their tax returns by using Extension Form 4868.
15 June is also the deadline for individuals to pay the second quarter of their 2022 Estimated Income Tax payment, for those electing the pay-as-you-go mode.
15 September 2022: Final extended deadline for Owners of Foreign Trusts to file Form 3520-A.
15 September is also the deadline for individuals to pay the third quarter of their 2022 Estimated Income Tax payment.
17 October 2022: Final extended deadline for resident taxpayers to file their 2021 Individual Federal Income Tax returns; final extended deadline for filing 2021 FBAR forms; final extended deadline for filing 2021 Corporation Income Tax return; and the final date for expats to request an additional two-month extension for their 2021 tax return.
15 December 2022: Final extended deadline for filing 2021 Individual Federal Income Tax return for expats who have requested an additional extension. It is also the final extended deadline for non-resident aliens who requested an extension, on or before June 15, to file their 2021 Individual Federal Income tax returns.
What to do if you missed a deadline...
Tax experts suggest the best thing you can do if you have missed a deadline is to file your return and hope for the best. You are considered to be late if you fail to file a return on time and have failed to request an extension by that point.
If you do file late, you’re likely to be hit with a moderate financial penalty – the official rate is 5% of the taxes owed for each month the filing is late, up to a maximum of 25%.
The IRS is also likely to charge interest on the unpaid tax amount, and may charge a 0.5% per month lateness penalty.
Since that was issued, the minimum late-filing penalty for those who filed more than 60 days late increased to US$215. However, individuals with a history of filing their tax returns punctually may well qualify for the IRS’s first-time penalty abatement program.
Find out more information on the IRS’s 2021 deadlines and access the agency’s “Online IRS Tax Calendar”.
Find out more about what the US' IRS calls “tax filing season.”
American expat taxpayer change
The 2018 tax year saw the implementation of a number of changes to the US tax code included in President Trump’s so-called Tax Cuts and Jobs Act. The changes have been described as the largest overhaul of the US tax code in three decades.
The Act introduced new tax rates, an increased standard deduction, limited itemized deductions as well as some expat-specific changes. Expat taxpayers are being urged to do their homework this year.
Expats should be aware that the 1040-A and 1040-EZ tax forms have been replaced by a single Revised Form 1040, which is intended to be used alongside one, none or all of a choice of six “schedules”. Further information about the single Revised Form 1040 can be found on the IRS’s website.
American expats with an interest in a non-US business are also affected by the changes. They risk being included in a category of new taxes aimed at major US tech companies with substantial overseas operations.
American expats who own all or part of a foreign-owned business may wish to consult an American tax professional this year, to avoid costly mistakes with this potentially tricky element of their 2021 filing.
Martin is part of the Schroders Wealth Management US Team specialising in international wealth and investment management for both US residents and internationally based US clients. Martin has over 25 years’ experience in advising and growing clients’ wealth utilising stock market investments and working in partnership with clients’ other professional advisors. Prior to joining Schroders, Martin was the Head of Americas at the Royal Bank of Canada Wealth Management International in London and before that was Head of Private Wealth Management for Kleinwort Benson. Martin is a Registered Investment Advisor with the Securities Exchange Commission (SEC) in the USA and holds the Uniform Investment Advisor Law qualification with the Financial Industry Regulation Authority (FINRA).
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