There's More Than Just Your US Tax Return Due on June 15th!
As an American living in Germany, you're likely aware of your expat tax filing requirements and have marked your calendar accordingly as the June deadline quickly approaches. However, there's been a big change to the Foreign Bank Account Report deadline and it affects all Americans, no matter where you're living. Here's what you should know about the upcoming June deadline!
First Things First: Expat Taxes
Like always, the expat tax deadline this year falls on June 15th. Any US citizen living abroad on Tax Day (which was April 18th this year) receives this automatic two-month extension. Also note: you can also file an additional extension request, which would make your expat taxes due October 16th.
However, you should know that any taxes owed were technically due on Tax Day (April 18th) and you'll be responsible for paying interest on any amount owed until the IRS receives your payment. Don't know how much you may owe and not ready to file? No problem! You can use Form 1040-ES to determine your estimated amount due and submit a payment based on that amount.
Don't Forget State Taxes
Though not applicable to all expats, if you lived in certain states prior to your move abroad, you may need to file a state tax return in addition to your expat taxes. You'll want to check on the filing requirements in the state where you last lived to see if you have a filing obligation. Some states follow the Federal filing deadline of April 18th, but many others have their own deadlines. It's so important to stay on top of your state filing obligations to avoid missing a deadline!
Big FBAR Changes in 2017
The Foreign Bank Account Report (FBAR) has been around for many years, and it's used as a tool for reporting foreign financial account balances that exceed a specific dollar amount. Beginning this year, though, there's been a big change - the FBAR now follows the US tax deadlines.
Who Needs to File?
Any US person (citizen or resident alien) must file an FBAR if he or she has one or more foreign financial accounts with a total balance exceeding $10,000 at any point during the calendar year. This is also applicable to US companies with balances exceeding the $10,000 threshold.
What Must Be Reported?
Generally speaking, Americans living in Germany will likely have foreign bank accountant balances to report - but it's important to note that other types of foreign accounts must be included as well, such as:
- Foreign mutual funds
- Foreign account(s) held at a foreign branch of a US bank
- Foreign stock or securities held in a financial account at a foreign financial institution
- Foreign-issued life insurance or annuity contracts with cash value
What is the New Deadline?
In the past, the FBAR had its own deadline, which made things a bit harder to keep track of! Now, however, the FBAR due date falls in line with the US tax deadline - which means FBARs for expats living abroad will be due June 15th. To help all Americans become accustomed to the new FBAR deadline, the US Treasury Department is offering an additional automatic extension until the final tax deadline of October 16th.
Where to Begin
If you haven't already began preparing to file your expat taxes, now is the time to do so! You should start by gathering important documents and other tax information, as you'll need these details whether you file your own taxes or work with a tax professional. You may find this list of documents needed for tax preparation helpful as you get started, to ensure you have everything you need!
This post was written by David McKeegan, co-founder of Greenback Expat Tax Services. Greenback specializes in the preparation of US expat taxes for Americans living abroad. Greenback offers straightforward pricing, a simple, hassle-free process, and CPAs and IRS Enrolled Agents who have extensive experience in the field of expat tax preparation. For more information about FBAR, expat taxes or Greenback, please visit www.greenbacktaxservices.com.