expat tax extension info

[ericdharma]

I am living in BA now and I'm having too much fun to go home and deal with my taxes. I have been in denial about the fact that I was planning to get back before April 15 when in fact that was never going to happen. Now I need to know:


A. Is there a tax provision for expats that would provide some sort of extension or temporary exemption (I was living in the U.S. for all of last year except December)?

B. How can I get the necessary forms for filing if I can't get an extension ?

C. Are there licensed U.S. tax specialist working here in B.A. who can help and how do I contact them?

D. does anyone here on this board have previous experience with any of this?

 

[Fullmettlejaquette]

There is an automatic extenstion expat exemption available if you are living abroad for the majority of the year, there is exact formula for this. Clearly you are ineligible for 2005, but does anyone know if you are living abroad in 2006 whether that gives you a break for 2005?
You can download and print a PDF file from the irs web site and file for an extension before April 15. However, you do need to pay taxes owed.

 

[bigbadwolf]

There is an automatic extenstion expat exemption available if you are living abroad for the majority of the year, there is exact formula for this. Clearly you are ineligible for 2005, but does anyone know if you are living abroad in 2006 whether that gives you a break for 2005?

You can download and print a PDF file from the irs web site and file for an extension before April 15. However, you do need to pay taxes owed.

Everyone can apply for an automatic two-month extension, and I think in most cases you can apply for a four-month extension as well (I have to check, though). You can file a 1040 electronically or by sending a paper 1040 to the IRS office some place in Texas (details at www.irs.gov). Most other accompanying schedules can also be filed electronically.

 

[Fullmettlejaquette]

There is a new change for 2006. Automatic SIX MONTH extensions. Used to be you had to file a form for the first four month automatic extension, and then for the second two month extension, had to file another form with a stated reason (not automatic).In either case due taxes are still due on April 15, or a penalty and interest applies. http://taxes.about.com/b/a/191508.htm?iam=metaresults&terms=revise+for However, we still need info on the expat extension which is a different thing. Americans who are living abroad most of the year (there is an exact amount of days to qualify) do not even need to file any form. What I don't know if this extension excuses paying due taxes by April 15. I would assume that if you did not meet the formula for 2005, this would not be in play. However, if you are living abroad in 2006, it would in future.

 

[VillaFamilia]

Extensions on taxes due are never applicable. Whether or not you are living abroad, taxes are due on April 15th every year, otherwise the interest and penalties apply and are accumulated from that date. You are able to request an extension in filing, but not an extension in payment. In other words the IRS expects you to make a payment on account and after you file your taxes, they refund you the difference in your favor or the penalties/interest only accumulate on the balance. If you have lived outside of the country for 186 days of the year (and can prove it - if asked) an extension is not required to be filed, however please note when your taxes are filed and a balance is deemed due the interest will be applied.
I am relocating to BsAs for two years in September and am an accountant, if anyone needs help in the future feel free to drop me me an email, [email protected]
HV

 

[Fullmettlejaquette]

Villla, a question has come up on www.RetireAway.com about capital gains tax exclusion on primary residence. I wonder if you have an opinion. Lets say a US expat buys a flat in BA and lives there as his primary residence for over 5 years (to simplify, lets say it is a retiree), and then they sell with a profit, would they be entitled to the 250K USD capital gains tax exclusion afforded them if the primary residence was in the US? Thanks.
Would it make any difference listed this BA address on his tax return? Because I know lots of expats use "faux" Us addresses (friend or relative) for things like bank accounts and maybe even tax returns.

 

[Fullmettlejaquette]

Nashorima,
Hi there, you just posted some excellent info that I am going to take some time to digest. Thanks!
As far as www.RetireAway.com , I respect your opinion, but I would like to explain what the site is. It is a new site that is now being seeded mostly by me under the name Jeffrey, and it is a totally OPEN FORUM. The site is not trying to sell anybody anything directly (except that it will run adsense ads and such). It is meant to be an international totally OPEN forum to provide support and information sharing for Americans retiring abroad. It also is a site totally open to stating very negative things about retiring abroad, for example American can't get Medicare outside the US.
I do think I understand how you got that bad impression. In fact, I intend to make some changes so that others do not gain the same impression, because it is NOT the intention of the site to push unrealistic dreams! As the person running the site, I do want lower and moderate income level Americans to at least have a look at the option of retiring abroad. For some such people, there may be a real economic advantage to living off a small social security check in a lower cost location such as Thailand or Nicaragua, as opposed to being a total pauper in a high cost US area. The reality is the projections are that about 4 million baby boomers will be retiring abroad. They need support and information because there are tons of pitfalls involved in actually pulling it off.
That all said, I do hope to get some support from the Argentina community by posting whatever you think is appropriate and helpful to users. If you think some info in a post is crock, please respond and say why it is a crock!
In the long run, whether it turns out to be RetireAway, or other sites, this service of info sharing with retired American expats is going to be very important to these expats. I know this for a fact, because I am a heavy user at www.thaivisa.com, and for thousands of users there, it has in some cases even saved their lives.

Ciao

 

[Fullmettlejaquette]

Thanks Nashororma,
Yes, indeed, there are alot of shysters in retiring abroad businesses. Some of them are obvious scams and others are much more crafty.
In looking into retiring abroad, I was kind of rudely shocked about how complicated it is to deal with all the details. Since 911, there are even more restrictions on things like banking and money transfers; sometimes I get the feeling we are looked on as suspects. Clearly the US does not have the same kind of "being an expat is normal" culture as the UK. But, with these millions of Americans soon to move abroad, I want to be involved in creating some of that culture. Since I found I needed help and advise around the details, I figured others would want that as well.
Your comments on Vietnam are interesting. The last time I checked, the visa situation was difficult for permanent retirement. I am curious to look at it again. To my mind, if the visa thing is too difficult, it is never going to be a popular country choice. In SE Asia, Thailand is of course number one, but more people are looking into Malaysia, where you can own land and they have a very organized retirement visa program. Cambodia is a problem for Americans (difficult banking and you aren't supposed to be allowed to get social security checks living there). Of course, Burma is pretty much impossible, but if they ever change their government, their tourism and expat scene will boom, but that might be 50 years away. Never heard of an American expat wanting to move to Laos either.
Anyway, I am kind of jealous of you all in Buenos Aires. I still crave those steaks!

 

[VillaFamilia]

It seems as though all the questions were answered - I was a little late. Just a few comments... 1) remember you can earn up to $80,000 usd a year outside the US and not have to pay taxes on it. You still have to file it - but you will not be income tax liable. As far as properties outside of the US - it is my experience that you should never own one in your name - it causes too many problems if you want to follow everything to the law. If you have no problem "forgetting" to report properties outside of the US on your US tax return and living as if they do not exist no problem having it in your name - if you prefer to follow everything by the book, open up a small company in the country in which you have your property and have the property in the company's name.
I respond quicker via email!