Expat Tax Info from Barron HarperAmericans Approach Tax Paying Deadline

By Barron Harper
www.taxbarron.com

The United States is very likely the only country to require that U.S. citizens and deemed residents file an annual tax return on which they report world-wide income. Other countries impose this requirement only on residents. A not infrequent consequence of the U.S. tax filing obligation is double taxation. Although up to $91,500 in foreign earnings can be excluded by a Foreign Earned Income Exclusion from U.S. taxation and although the Foreign Tax Credit can take up the slack on foreign incomes that overpass the FEIE limit, complicated qualifications and calculations can result in a compliant albeit hapless filer paying taxes to the American government on income already taxed by the foreign country of residence. This is why tax planning and competent preparatory skills are essential in keeping the penalty-minded American tax authority at bay.

One rather noteworthy penalty that the Internal Revenue Service assesses is for lateness in filing a tax return or for late paying a tax liability. Stateside the deadline for filing and paying is normally April 15. American expatriates, however, are given a grace period to 15 June for filing their annual tax return. The tax filing deadline can be extended to 15 October by filing a Form 4868. However, the tax paying deadline of mid-April cannot be extended.

This year the paying deadline is 18 April. This means that any taxes calculated on 2010 income (after FEIE and FTC are applied) must be received by the IRS Service Center no later than 18 April. For those paying by check, a foreign postmark does not impress the taxman. In other words, if you send a check by certified or registered mail that the post office stamps before or by the due date but your payment does not reach IRS until after the 18th, expect to receive a late-payment penalty.

Paying taxes can also be done by Direct Debit or Credit Card. Instructions for doing so can be found on the IRS website at: http://www.irs.gov/efile/article/0,,id=101316,00.html. In addition to satisfying your 2010 ?????a???Ð?????liability, IRS mandates Estimated Payments. These payments occur quarterly, the first one being due 18 April. The amount to pay is either 90% of the actual tax for 2011 or 100% of the tax from the 2010 tax return (110% if gross income is over $150,000).

The address for mailing your 2010 tax payment is:
INTERNAL REVENUE SERVICE
PO Box 1303
Charlotte, NC 28201-1303

Estimated tax payments should be sent to:
INTERNAL REVENUE SERVICE
PO Box 1300
Charlotte, NC 28201-1300

The check must be made payable to DEPARTMENT OF TREASURY and include the words ‘2010 Form 1040’ or ‘2011 Form 1040ES’ and the last 4 digits of your Social Security number.

Related Link:
Expat Tax Services

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