Filing a US Tax Extension with Form 4868 – A Guide for Expats

While the IRS automatically grants an automatic two-month extension for Americans living abroad, many expats need more time to file. Fortunately, you can file Form 4868 to request an additional four months to October. 

In this article, we walk you through the process of filing for an extension. We cover expat tax deadlines, filing requirements, and possible penalties to keep in mind.

Why file for a tax extension as a US expat?

As a US expat, filing Form 4868 for a tax extension can provide valuable extra time to gather essential documents. These might include as foreign income reports or foreign tax statements. This is especially useful for those with complex tax situations, like the self-employed or business owners, or those experiencing significant life changes. It also gives expats more time to file their local taxes first, especially in countries with a different tax year or a later filing due date. 

While expats already get an automatic 2-month extension, this may not be enough. This might be because you’re claiming the Foreign Tax Credit, for example.

Filing for an extension also gives you extra flexibility and peace of mind. However, it’s important to remember that an extension only applies to the filing deadline, not the tax payment deadline. If you owe taxes, interest and penalties will begin to accrue on any unpaid amount after April 15.

Understanding the automatic two-month expat extension

US expats are granted an automatic two-month extension to file their US tax return. This means that, instead of the normal April 15 deadline, expats have until June 15 to file their US federal return. The two-month extension is available simply by being a US citizen or resident living abroad on April 15.

File Form 4868 for an additional four-month extension

If you need longer than June 15 to prepare your taxes, you can file Form 4868 to extend your deadline for an additional four months. This form will extend your filing deadline to October 15. The process is simple: filing Form 4868 can be done electronically or by mail.

Form 4868 requires just simple information: your name, address, Social Security number, and an estimate of the taxes you owe. You can download Form 4868 on the IRS website, and you can file it either through e-file or by mailing it to the IRS.

How expats can E-File Form 4868

The easiest way to file Form 4868 is by using the IRS e-file system. There are different ways to do this:

1. Ask an expat tax professional to file it for you. At Online Taxman, we can take care of this for you.
2. IRS online filing: If you’re not using an expat tax service, you can visit the IRS website to find an approved e-file provider.

If you expect to owe taxes, use the Electronic Federal Tax Payment System (EFTPS) to pay any estimated taxes. Alternatively, you can pay with a card or bank transfer here.

Filing Form 4868 by mail

While e-filing is the fastest and most efficient option, you can also file Form 4868 by mail if you prefer. Just download and complete the form, and mail it to the address indicated in the instructions for Form 4868. 

Mailing a form, however, can take longer, so it’s advisable to mail it well in advance. The IRS suggests sending it via certified mail and asking for proof of submission.

How to complete form 4868

1. stimated tax liability (Line 4): Provide an estimate of the total taxes you expect to owe for the year. If you anticipate a refund, enter “0.”
2. IRS payments (Line 5): Report any tax payments you’ve already made for the current tax year.
3. Balance due (Line 6): Subtract the amount on Line 5 from the estimated tax liability on Line 4 to determine the remaining balance you owe. If the calculation results in a refund, you’ll indicate this amount on Line 7 instead.
4. Amount paid with extension (Line 7): If you are submitting a payment with your extension request, enter the amount here. If no payment is due, enter “0.”
5. Out of the country (Line 8): Check this box if you’re a US citizen or resident living abroad. Doing so confirms you qualify for the automatic two-month filing extension.

What happens if you don’t file Form 4868?

If you don’t file Form 4868 and file late, the IRS may charge penalties and interest, assuming you owe taxes.

If you file Form 4868 on time and don’t owe taxes or make an appropriate payment, you will avoid penalties and get extra time to file. However, this benefit applies only if you follow the rules for paying taxes on time.

The Form 4868 extension benefit for expats

Filing Form 4868 provides expats with extra time to gather their documents and properly prepare their returns. However, the process can be complex, especially when dealing with tax compliance and due dates in two jurisdictions while minimizing your tax bill in both. 

At Online Taxman, we can help you file an IRS extension, meet all expat reporting requirements, minimize your US tax bill and avoid penalties, giving you confidence and peace of mind while you enjoy your adventure abroad.