If you are a foreign national living in the U.S., your status could impact how you do your taxes.

Generally, foreign nationals who are considered resident aliens are taxed the same as U.S. citizens. Therefore, your international income must be reported on your U.S. tax return.

If you are considered a non-resident alien, income typically subjected to U.S. income tax returns will be divided into two categories: that which is related to U.S. trade or business and that which is not. After applicable deductions, income connected to U.S. trade or business is taxed at a graduated rate. In contrast, income not connected to the U.S. is taxed at a rate of 30% (or lower if a treaty rate is applicable).

These facts will serve as a starting point in learning how to file for a tax extension as a foreign national living in the U.S. Be sure to consult with our firm if you need additional assistance.

Q: How do I know if I am a U.S. resident alien or non-resident alien for tax purposes?

A: A resident alien for tax purposes in the U.S. is someone who meets the criteria for a “green card” or “substantial presence” as outlined by the IRS. This applies to U.S. citizens and foreign nationals.

For tax purposes, a non-resident alien is a U.S. citizen or foreign national that does not meet the “green card” or “substantial presence” tests outlined by the IRS.

Q: When is the deadline to file my U.S. taxes?

A: The deadline to file your taxes is April 15. For the 2020 tax year, it was automatically put forward to May 17. If the home you live in and your principal place of business are outside of the U.S. and Puerto Rico on April 15, you may receive an automatic extension to June 15, for both resident and non-resident aliens. The deadline for U.S. foreign nationals is usually the same as that for U.S. citizens.

Q: Why should I file an extension if I cannot meet the original deadline?

A: Filing your taxes late can result in troublesome financial penalties. Generally, the penalty is 5% of the amount due for each month your return is late. The maximum penalty is 25%. If your return is more than 60 days late, the minimum penalty is $435 (adjusted for inflation) or the balance of the tax due on your return, whichever is smaller.

Q: When do I have to file for an extension?

A: If your deadline to file your taxes is April 15, you must file for an extension by April 15, 2021. If you qualified for the automatic extension until June 15, you must file for an extension by June 15.

Q: What forms do I use to file an extension?

A: As a resident alien or a non-resident alien, you must file the IRS Form 4868 by your tax deadline to receive an extension. Your tax deadline can be extended to October 15. This form also outlines additional important information about filing for an extension.

Q: Does filing an extension extend how long I have to pay any taxes owing in the U.S.?

A: No. Filing an extension does not extend the length of time you have to pay any taxes owing in the U.S. You will still owe interest and may face penalties if you do not pay your taxes by the original deadline.

If you need assistance filing an extension for your U.S. taxes as a foreign national, we’re here to help. Contact our firm today.