If you are a U.S. citizen resident alien or citizen with dual citizenship who has lived or worked abroad during all or part of 2013 the Internal Revenue Service would like to remind you that you may have a U.S. tax liability and filing requirement in 2014.
The filing deadline for U.S. citizens and resident aliens living overseas or serving in the military outside the U.S. on the regular due date of their tax return is June 16 2014. Taxpayers who fall into this category can take advantage of this automatic two-month extension by attaching a statement to their return explaining which of these two situations applies. The normal June 15 deadline has been extended one day since the due date would fall on a Sunday this year.
If you are a nonresident alien who received income in the U.S. in 2013 you must also determine whether or not you may have a U.S. tax obligation. Depending on the source of your income deadlines for filing can be April 15 or June 16. Check the Taxation of Nonresident Aliens on IRS.gov to determine your status.
U.S. citizens and resident aliens are required by Federal law to report any worldwide income including income from foreign trusts and foreign bank and securities accounts. In most cases affected taxpayers need to fill out and attach Schedule B to their tax return. Certain taxpayers may also have to fill out and attach Form 8938 to their return which is the Statement of Foreign Financial Assets.
In filling out Part III of Schedule B U.S. citizens are usually required to report the existence of foreign accounts such as bank and securities accounts and the country in which each account is located. U.S. citizens and resident aliens and some nonresident aliens must also report specified foreign financial assets on Form 8938 if the aggregate value of those accounts exceeds certain thresholds. See the instructions on this form to determine if you are liable for this type of reporting.
Taxpayers with foreign accounts with aggregate value that exceeds $10000 at any time during 2013 must file electronically with the Treasury Department a Financial Crimes Enforcement Network (FinCEN) form 114 a Report of Foreign Bank and Financial Accounts (FBAR). This form replaces the TD F 90-22.1 the FBAR form that was used in the past. That form is due back to the Treasury Department by June 30 2014 and must be filed electronically online through the BSA E-filing System website. For more details regarding the FBAR requirements see Report of Foreign Bank and Financial Accounts.
IRS Free File can now be used by taxpayers abroad to file returns for free. This means that both U.S. citizens and resident aliens living abroad with adjusted gross incomes of $58000 or less can use brand-name software to prepare their returns and then e-file them for free. Another option available is to use the Free File Fillable Forms the electronic version of the IRS paper form which has no income limit and is best suited for people who are comfortable preparing their own return. For more information check out the e-file link on IRS.gov for details on electronic filing options.
There are a number of companies that provide tax filing software that can accommodate foreign addresses. Both e-file and Free File will be available until October 15 2014 for anyone filing a 2013 return. Taxpayers here or abroad with tax questions can use the online IRS Tax Map and the International Tax Topic Index to get answers. These online tools assemble or group IRS forms publications and web pages by subject and provide users with a single entry point to find tax information.
For more information about this topic schedule a first consultation with Lindemeyer CPA.
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