IRS Reminds Nonresidents, Owners Of Foreign Assets, And Others Of Looming Deadlines

IR-2013-54

The IRS has issued a reminder to taxpayers with a variety of foreign-related connections about upcoming filing obligations. Citizens and resident aliens living abroad may have to file by June 17, 2013, for example. Owners of certain foreign accounts must file by June 30, 2013, the IRS also noted.

U.S. taxpayers abroad

The IRS reminded U.S. citizens and resident aliens (green card holders) living abroad or serving in the military outside of the U.S. (on April 15) that their filing deadline for 2012 income taxes is June 17, 2013. These taxpayers get an automatic two-month extension from the April 15 deadline to file and to pay; plus, they get two additional days this year since the June 15 deadline falls on a Saturday. To obtain the two-month extension until June 17, taxpayers must attach a statement to their return explaining why they are entitled to the extension. Taxpayers can request an additional extension to file until October 15, 2013; payments after June 17 will be subject to interest and late-payment penalties.

Nonresident aliens

A nonresident alien owes U.S. taxes on income that is effectively connected with a U.S. trade or business, and on income that is fixed, determinable, annual or periodic. The former is taxed at graduated rates; the latter is subject to 30 percent withholding. Taxpayers must file Form 1040NR.

Persons receiving wages or non-employee compensation subject to U.S. withholding had to file a 2012 return by April 15, 2013. Individuals who do not receive wages on non-employee compensation but who have U.S. income must file by June 17, 2013. Taxpayers can request an automatic extension until October 15 if they cannot meet the deadline.

Foreign accounts

Taxpayers with foreign accounts whose aggregate value exceeded $10,000 at any time during 2012 must file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR). These reports are due June 30, 2013 and are filed with the Treasury Department rather than the IRS. No extensions are available. However, some individuals with signature authority only and no financial interest in a foreign account have an extended deadline of June 30, 2014.

The IRS noted that Part III of Schedule B of Form 1040 asks taxpayers if they had an interest over a financial account in a foreign country. Taxpayers must have answered these questions independent of any obligation to file an FBAR.

Foreign financial assets

Although not necessarily subject to an impending deadline, the IRS also reminded taxpayers, including U.S. citizens, resident aliens, and certain nonresident aliens, that they may be required to file Form 8938, Statement of Specified Foreign Financial Assets, with their annual income tax return. Filing is required if the value of the assets exceeds certain thresholds, generally $50,000 or more. The instructions for Form 8938 provide more details on taxpayers’ reporting obligations.

 Above summary of IR-2013-54 from CCH Federal Tax Weekly, No. 22, (May 30, 2013).

IR-2013-54 (Click on link to right) IRS REMINDS THOSE WITH FOREIGN ASSETS OF US TAX OBLIGATIONS

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