EXTENSIONS TO GAIN DAYS, by Jean Mammen, EA

The three, maybe four, ways to request an extension of the due date for filing a tax return may be used by filers who need more time to meet the number of days required to use Form 2555, or to claim the first-year choice to file as a tax resident by substantial presence in the US for part of the first year in the U.S.

Of course, payment of any expected balance due must be made by April 15, or late payment interest and penalties will begin to accrue.

Do you need more days to reach the qualification level for the foreign earned income exclusion (Form 2555) – 330 full days in a foreign country out of 365 consecutive days? Or to meet the bona fide residence test?

Do you need more days so that you file your first-year-in-the -U.S.  tax return AFTER meeting the substantial presence test in your second year in the US on a visa, 183 full or partial days in the US.? This would qualify you to make the first-year choice to start your US tax residency on your first qualifying day in the US in your first year.  See first-year choice in IRS Publication 519 or in Jean Mammen’s ‘1040NR or 1040? U.S. Income Tax Returns for Visa Holders  +  International Organization and Foreign Embassy Employees’.

You could file by April 15, before you have the days to qualify, and then amend the tax return once you do qualify.

Or, request an extension:

1)      Extension to file by June 15 instead of April 15 – This extension is requested by attaching a statement making the request to the tax return.  In the statement, you explain how you qualify for this extension.  The justification is that you are living outside the US and your main place of business (tax home) is outside the U.S.  This two-month extension applies both to private persons, who might be using form 2555, and to military or USG personnel posted outside the U.S.  USG personnel do not qualify to use Form 2555. This also extends the due date for payment of a balance due, but you will pay interest for late payment.  This request is granted automatically if you meet the qualifications.

2)      The standard extension request to file by October 15, using form 4868. If you might have a balance due, use part II to estimate your balance due and make that payment at the same time you file the extension request.  NOTE: Perhaps you were requesting the two-month extension, but circumstances changed so that you could not file by June 15.  If  you file form 4868 by June 15, you still qualify for the October 15 filing extension date. A qualifying request on form 4868 is granted automatically.

3)      Use form 2350 to request an extension for up to 30 days beyond the date you expect to meet the qualifications to claim the foreign earned income exclusion using form 2555.  This can take your filing due date past October 15. The application is mailed to the IRS office in Austin, Texas, 73301-0045.  It must be filed by the due date of your return, either April 15, or June 15 if both your tax home (where you earn income) and your ‘abode’ are outside the U.S. The request is not granted automatically, but on a case-by-case basis.

4)      You may also make a request by letter to the IRS for a discretionary two-month filing date extension to December 15, if you are out of the U.S. You must fully explain the need for this extension.  You must file the letter by the extended due date of October 15.  You must not have requested on extension using form 2350.  Send this letter to the Austin, Texas IRS address above.

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