Americans Overseas – Tax Filing Due Dates and Payment Options

As the April tax filing due date looms, many US persons living abroad are finishing up their US tax returns and getting ready to pay the taxman.  First of all, what is the tax filing due date in 2019?

When to File

Generally, the federal income tax return and tax payment are due April 15—unless the timing is changed for example, such as the date falling on a weekend or on a holiday.  If a tax deadline falls on a Saturday, a Sunday, or a legal holiday, the due date is typically moved to the next business day.  There is no need to tinker with the April 15 filing date in 2019, however. April 15 falls on a Monday and it’s not a holiday.  This means the filing deadline for the 2018 income tax return is April 15, 2019.

For Americans abroad, an automatic extended due date is granted for a 2-month period (in 2019 until June 17 since June 15 falls on a Saturday). However, many overseas Americans still wish to pay by the April deadline. This is in order to avoid interest charges.  Yes, even if you qualify for the automatic extension, you will have to pay interest on any tax not paid by the regular due date of your return (April 15 for calendar year taxpayers).

If you qualify for the 2-month extension but are unable to file your return by the automatic 2-month extension date, you can request an additional extension to October 15 by filing Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return.  This Form must be filed on or before the automatic 2-month extension date.

More information prepared by the Internal Revenue Service (IRS) on tax filing requirements for Americans abroad is here.

How to Pay the Taxman

Payment of US taxes must be made in US dollars. Making actual tax payments when you are an American abroad can be a bit cumbersome if you do not maintain a checking or other account in the United States.  As a result of the infamous “Foreign Account Tax Compliance Act” (FATCA) various US-based financial institutions have restricted services or closed accounts for Americans who cannot provide a permanent US address.  As such, it may be very difficult, if not almost impossible to maintain a US account as an American abroad.

Here’s a rundown of your tax-paying options.

Payment by Certified Check or Banker’s Draft in US Dollars

Many clients use this method to make payment of their taxes.  If the tax return is being e-filed, the check is mailed separately to the IRS along with the 1040-V voucher that ensures proper crediting of the payment.

A certified check (banker’s draft or banker’s check)  is usually considered a relatively safe and reliable method of payment.  These types of checks carry a guarantee from the payer’s bank that the funds will be available when the check is cashed by the payee. Essentially, a certified check is guaranteed with funds from the bank and is a check that is signed by the bank. Since it is not from the individual’s personal account and a “stop-payment” order cannot be put on a certified check, this type of check is viewed as good as cash.  

Most non-US banks will allow you to get a cashier’s check in United States dollars in exchange for the cash amount requested, plus the bank’s processing fee.  The check should be made payable to the “United States Treasury”. You may  need to leave yourself some time to obtain a certified check as some banks may require time to process them.  In addition,  you should discuss with the bank how you can add your identifying information on the check (e.g., your name, taxpayer identification number, tax year and so on) so that you can be given proper credit by the Internal Revenue Service (IRS) for having paid your taxes.  Some banks are very particular about what you can write on the face of the check and you may have to put this information on the back of the check.

There are various other options for paying your U.S. taxes.

Credit or Debit Card

This option is useful if you do not have a US bank account, but the processing and fees can be very costly.  Your payment will be processed by a so-called “payment processor” who will charge a processing fee.  The fees vary by service provider and may be tax deductible.  Refer to the Pay Your Taxes by Debit or Credit Card website with details regarding this process and associated fees.

Electronic Federal Tax Payment System

The Electronic Federal Tax Payment System, or EFTPS, is a system provided by the US Treasury but it is only available if you have a US bank account. With EFTPS you can conveniently pay your taxes either online or by phone from anywhere, 24/7, 365 days a year. It’s fast and easy, with step- by- step directions that help you make payments in minutes. It also helps ensure accuracy and reduce penalties by allowing you to schedule payments in advance and review your information throughout the process.  Read more about EFPTS here. 

Federal Tax Application (Same-Day Wire Transfer Direct to IRS). 

If you do not have a US bank account, it may still be possible to make same-day wire transfers directly to the IRS. Your foreign bank must have a banking relationship with a US bank, although the US bank does not have to be an affiliate or otherwise related to the foreign bank.  Small local banks may not be able to affect an international wire transfer but most large banks can.  If your bank is able to transfer money to the US, it will ask you to complete an application for international wiring.  You will need the Routing Transit Number (RTN), also known as the American Banking Association (ABA), number for the “Destination Bank”, sometimes referred to by banks as “Beneficiary’s Bank”.

To complete a wire transfer you will need the following information:

  • A completed Same-Day Taxpayer Worksheet
  • IRS account number – 20092900IRS (optional)
  • IRS account RTN/ABA Number – 091036164 US TREAS SINGLE TX

More information can be found here. 

In order to complete an international wire transfer through your foreign bank, you will need to complete the Same-Day Taxpayer Payment Worksheet (PDF) with the proper Tax Type Code and tax period (year and/or quarter) so that the funds will be properly applied to your IRS tax liability.  After you have completed the worksheet, take it to your bank to request international wiring.

You should complete the Same Day Taxpayer Worksheet PRIOR to going to your bank.  The information from the worksheet will be needed to complete the wiring application required by the bank.

If your foreign bank needs assistance, they may contact the Federal Tax Payment Service Customer Service at 314-425-1810 (Not toll free).  If you have questions regarding international wiring, please contact your local office internationally for assistance.

For more information on these payment methods, visit the Electronic Payment Options Home Page.

Accounts with ACA and SDFCU – Not Alphabet Soup!

Another very helpful and practical option for Americans abroad is available.  Thanks to the partnership of sorts between the American Citizens Abroad Inc., (ACA) a non-profit organization, and the State Department Federal Credit Union (SDFCU), overseas Americans can open up an account in the USA even if they cannot provide a US residence address. This is important because as a result of FATCA various US-based financial institutions have closed their doors to Americans who cannot provide a permanent US address. 

The SDFCU has years of experience working with expatriates and has traditionally offered accounts to Americans who work at embassies and other locations abroad. Under an agreement reached with ACA,  members of the ACA are eligible to open an SDFCU account.  You do not need to have a US address to open an account, and you don’t have to be a federal employee!  You just need to be a member of ACA – a membership that is both reasonably priced and helpful for many other needs in the world of US expats.

Read more about the ACA-SDFCU alliance and this US account option, here.  

Don’t Delay

The IRS anticipates that most taxpayers will be affected by major tax law changes. While most will get a tax refund, others may find that they owe taxes, many of whom may qualify for a waiver of the estimated tax penalty that normally applies. See Form 2210, Underpayment of Estimated Tax by Individuals, Estates and Trusts, and its instructions for details.

Posted February 18, 2019

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