June 15 may be best known to many as the day that, in 1215, the Magna Carta – a precedent-setting "royal charter of rights" – was signed (by the application of a seal) by King John of England, at a place called Runnymede.
To millions of American expats around the world, though, it is famous for being the day that their U.S. taxes are due, unless they've applied for an extension to October – which they are within their rights to do, but it's not automatically given to them...
(Homeland Americans, of course, are required to pay their taxes by the 15th of April.)
What isn't known is whether the reason that expats are given more time than their Homeland counterparts is because of an official acknowledgement on the part of the IRS that filing one's taxes as an expat is significantly more complicated, in addition to the need to also file such extras as FATCA forms, FBARs and the like.
Meanwhile, even those expats filing their federal tax returns by June 15 are expected to pay any taxes that they owe by the April deadline, or expect to begin paying interest on the amount due from that date. An extended filing deadline, tax experts point out, does not grant a taxpayer an interest-free loan on the amount they owe.
The FATCA deadline
By now, most American expats will be aware of FATCA (Foreign Account Tax Compliance Act), a 2010 law that requires U.S. taxpayers who hold "foreign financial assets" that have an aggregate (total) value of US$50,000 or more are obliged to file a Form 8938, ("Statement of Specified Foreign Financial Assets", aka as a "FATCA" form).
This must be attached to their annual income tax return (which the IRS is urging taxpayers to file electronically where possible). The FATCA reporting threshold varies, depending on such things as whether the taxpayer is married or single, a bona fide resident of a foreign country, etc., so taxpayers are advised to ensure they get good advice in advance.
Because it's attached to the taxpayer's 1040 return, the FATCA deadline for expats is the same, which is to say, June 15, unless an extension is applied for.
Although FBARs actually date back to 1970, when something called the Bank Secrecy Act came into force, widespread awareness of them among expat taxpayers is fairly recent, as a result of a combination of more information on them being made available, and publicity about some eye-wateringly huge FBAR penalties that some U.S. taxpayers have been hit with.
One unfortunate result is that for some expat taxpayers, FATCA and FBAR obligations have become a frightening blur. A good explanation was provided earlier this year by the Association of Americans Resident Overseas' Paul Atkinson, who explained, in an article entitled "FBARs (FinCEN Form 114s), Form 8938s and Form 8966s: not just one but three ways Uncle Sam monitors Americans’ overseas holdings," that individual taxpayers are responsible only for the FATCA Form 8938s and FinCEN Report 114s – leaving the taxpayer's banks and financial institutions to file the Form 8966s, which are their responsibility under FATCA.
As for the taxpayer's deadline for filing their FBAR forms (which must be done electroncially, using the FinCEN BSA E-Filing System), it's technically April 15, but it automatically extends to Oct. 15 if this date is missed, even if an extension request isn't filed. (This year it'll be Oct. 17, as the 15th falls on a Saturday.)
(London-based tax expert David Treitel, of American Tax Returns Ltd., advises those looking to get an extension to check out this Form 4868, on the IRS's website...)
What if you miss the deadlines?
- IRS reminder to Americans abroad: 'File your 2021 return by June 15; eligible families can claim expanded tax benefits'
- Bright!Tax's Madeline Beuoy: 'What expats should do if they miss (Friday's) Oct. 15 expat tax-filing deadline'
- Uncle Sam Reminds YOU: Tax Day for expats who got extensions is Oct. 15
- Revealed: IRS’s sense of humor