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Tax Return Deadline for Americans Living Abroad (Mumbai)

Tax Return Deadline for Americans Living Abroad
American expats need to file their individual tax returns by June 15

US tax return formAlthough the April 18 deadline for US citizens to
file individual tax returns has passed, those living abroad have a two
month extension. This means they can file their individual tax returns
by June 15. There is also a possibility to request an additional
four-month extension by using Form Protected content .

For US citizens living and working abroad, there is also an option to
exclude all or a part of their foreign wages from US taxation. There
are two conditions to qualify for foreign earned income exclusion:

1. Work and reside outside the United States.

2. Meet either the Bona Fide or Physical Presence tests. A ‘bona fide
resident’ is a US citizen who resides in a foreign country for an
uninterrupted period that includes an entire tax year, which is equal
to a calendar year. A US citizen is considered physically present in a
foreign country only if they reside in that country for at least 330
full days in a period of one year.

Those who qualify will be eligible to exclude up to $91,500 for Protected content
or $92,900 for Protected content their annual foreign wages. There is a
possibility to exclude additional amounts paid by the employer for
housing. This can include any amount given for housing, rent or
education of dependent children, paid directly to a US citizen living
abroad or on his/her behalf by the employer.

US citizens qualified for foreign-earned income exclusion may claim
income exclusion, housing exclusion, or both. It is not possible to
exclude the same income twice. The housing exclusion should be only
considered if foreign wages exceed the foreign earned income exclusion
amount.

For US citizens self-employed in a foreign country, there are
additional tax considerations. The foreign earned income exclusion
will reduce only the regular tax liability, but not the self
employment tax. They can deduct their allowable housing expenses from
gross income. The foreign housing deduction reduces only regular tax
liability, but does not reduce self-employment tax liability.

As for tax liabilities of US citizens working and living overseas, the
US Government and the Internal Revenue Service (IRS) have recently put
their focus on unreported and untaxed money, which is held offshore by
US citizens. New measures by the IRS currently under proposal include
withholding US passports from individuals with unpaid taxes and/or
fining foreign banks for Foreign Bank and Financial Accounts (FBAR)
violations.

It is recommended “that Americans living abroad ensure that they take
three key actions to get compliant with their US expat taxes: file in
time for the June 15 deadline, report their foreign bank accounts by
June 30, and, if already delinquent, take advantage of the current
Voluntary Disclosure Program which expires on August 31 to get back on
track”.

Mumbai Forum