Important: June 17, 2019 U.S. Tax Filing Deadline

The 2018 U.S. tax sea­son is well under­way! Although many believe that the U.S. tax sea­son is over after the April 15 dead­line, the dead­line for many indi­vid­u­als and cor­po­ra­tions out­side of the U.S. is June 17, 2019. If you fall under one of the var­i­ous cat­e­gories of tax­pay­ers who are sub­ject to the June 17 dead­line, please be sure to mark the date in your cal­en­dars and have every­thing filed on time to avoid pay­ing penal­ties and inter­est. The typ­i­cal U.S. cit­i­zen and Green Card hold­er, liv­ing and work­ing in the U.S. is required to file their tax returns with the Inter­nal Rev­enue Ser­vice (IRS) no lat­er than April 15 each year. There is an exten­sion avail­able to those tax­pay­ers, that extends the time to file the return for 6 months. For U.S. cit­i­zens or res­i­dent aliens liv­ing and work­ing out­side of the U.S., you are enti­tled to an auto­mat­ic two month exten­sion to file and pay tax­es, with­out need­ing to file for an exten­sion with the IRS. Inter­est on any unpaid tax will be charged from the orig­i­nal due date of the return. To qual­i­fy for this auto­mat­ic exten­sion, you must include a state­ment with your tax return prov­ing that you meet the require­ments. Although this auto­mat­ic exten­sion is pro­vid­ed to ensure indi­vid­u­als locat­ed out­side of the U.S. are able to file their tax­es on time, an addi­tion­al 4‑month exten­sion can be applied for by fil­ing with the IRS.  

Persons/Corporations/Entities That Must Follow the June 17th Deadline

The U.S. is in a unique posi­tion on the world­wide stage, in that they are part of a select group of coun­tries that tax based on cit­i­zen­ship rather than res­i­den­cy. As such, U.S. cit­i­zens liv­ing out­side of the Unit­ed States must file their tax­es annu­al­ly to main­tain com­pli­ance with U.S. tax law. To assist U.S. cit­i­zens who must also file tax­es with their coun­try of res­i­den­cy, which can lead to com­pli­ca­tions in the appli­ca­tion of U.S. tax treaties for tax prac­ti­tion­ers, U.S. tax law grants an auto­mat­ic exten­sion of time to file for cit­i­zens who live and work out­side of the U.S. There are cer­tain oth­er indi­vid­u­als and enti­ties which must file their returns by the June 17, 2019 dead­line which are:

• U.S. cit­i­zens and Green card hold­ers liv­ing in Cana­da and oth­er­wise out­side the Unit­ed States;
• Cana­di­ans and oth­er non­res­i­dent alien indi­vid­u­als who sold their U.S. real prop­er­ty in 2018;
• Cana­di­ans and oth­er non­res­i­dent alien indi­vid­u­als who are claim­ing a refund of any over­with­held U.S. tax­es in 2018;
• Cana­di­ans and oth­er non­res­i­dent alien indi­vid­u­als with U.S. rental income mak­ing (or who made) net rental income elec­tion;
• Cer­tain Fis­cal year-end Cana­di­an and oth­er non‑U.S. cor­po­ra­tions that have a U.S. per­ma­nent estab­lish­ment;
• Cal­en­dar year-end Cana­di­an and oth­er non‑U.S. cor­po­ra­tions fil­ing a treaty-based pro­tec­tive return;
• Cer­tain Fis­cal year-end U.S. domes­tic cor­po­ra­tions.

U.S. citizens and Residents

The two month exten­sion from the April 15, 2019 dead­line applies to U.S. cit­i­zens and green card hold­ers that do not live or work in the U.S. One of the fol­low­ing tax Forms may be applic­a­ble if this is you. Form 1040 – U.S. Indi­vid­ual Income Tax Return This Form is the typ­i­cal U.S. tax return filed by indi­vid­u­als. It is uti­lized by U.S. cit­i­zens and Green Card hold­ers to file their annu­al income tax returns. The 2018 ver­sion of Form 1040 has a vari­ety of sched­ules that may need to be attached. It is expect­ed that the typ­i­cal tax­pay­er will not require any addi­tion­al Sched­ules to be attached to their return. If the return includes cer­tain com­pli­ca­tions, such as claim­ing spe­cif­ic cred­its or deduc­tions, you may need to com­plete one or more of the fol­low­ing Sched­ules: Sched­ule 1 — Addi­tion­al Income and Adjust­ments to Income (used for addi­tion­al income, such as cap­i­tal gains, unem­ploy­ment com­pen­sa­tion, prize or award mon­ey, gam­bling win­nings or if you have any deduc­tions to claim, such as stu­dent loan inter­est deduc­tion, self-employ­ment tax, edu­ca­tor expens­es.) Sched­ule 2 – Tax (used if you elect Alter­na­tive Min­i­mum Tax AMT or need to make an excess advance pre­mi­um tax cred­it repay­ment.) Sched­ule 3 — Non­re­fund­able Cred­its (used if you are claim­ing a non­re­fund­able cred­it oth­er than the child tax cred­it or the cred­it for oth­er depen­dents, such as the for­eign tax cred­it, edu­ca­tion cred­its, gen­er­al busi­ness cred­it.) Sched­ule 4 — Oth­er Tax­es (used if you owe oth­er tax­es, such as self-employ­ment tax, house­hold employ­ment tax­es, addi­tion­al tax on IRAs or oth­er qual­i­fied retire­ment plans and tax-favored accounts.) Sched­ule 5 — Oth­er Pay­ments and Refund­able Cred­its (used to claim a refund­able cred­it oth­er than the earned income cred­it, Amer­i­can oppor­tu­ni­ty cred­it, or addi­tion­al child tax cred­it or if you have oth­er pay­ments, such as an amount paid with a request for an exten­sion to file or excess social secu­ri­ty tax with­held) Sched­ule 6 — For­eign Address and Third Par­ty Designee (used to pro­vide a for­eign address or a third par­ty designee oth­er than your paid pre­par­er.) Form 2555 – For­eign Earned Income This Form incor­po­rates your for­eign earned income exclu­sion as well as any applic­a­ble hous­ing exclu­sion and deduc­tion. Form 5471 – Infor­ma­tion Return of U.S. Per­sons With Respect To Cer­tain For­eign Cor­po­ra­tions U.S. cit­i­zens and res­i­dents who are offi­cers, direc­tors or share­hold­ers in cer­tain for­eign cor­po­ra­tions are required to file Form 5471 to sat­is­fy Inter­nal Rev­enue Code report­ing require­ments. Form 8621 – Infor­ma­tion Return by a Share­hold­er of a Pas­sive For­eign Invest­ment Com­pa­ny or Qual­i­fied Elect­ing Fund A U.S. per­son that is a direct or indi­rect share­hold­er of a pas­sive for­eign invest­ment com­pa­ny (PFIC), have to file this Form, pro­vid­ed they ful­fill cer­tain require­ments. These require­ments are based on whether they:

• Receive cer­tain direct/indirect dis­tri­b­u­tions from a PFIC;
• Real­ize gains on a direct/indirect dis­po­si­tion of PFIC stock;
• Report infor­ma­tion relat­ing to a QEF or sec­tion 1296 mark-to-mar­ket elec­tion;
• Make an elec­tion reportable in Part 2 of Form 8621; or
• Need to file an annu­al report pur­suant to IRC sec­tion 1298(f).

Form 8833 – Treaty-Based Return Posi­tion Dis­clo­sure Under Sec­tion 6114 or 7701(b) This Form is used to make a treaty-based return posi­tion dis­clo­sure as required under IRC sec­tion 6114. This is usu­al­ly uti­lized by dual res­i­dent tax­pay­ers to indi­cate the treaty pro­vi­sion and explain the treaty based posi­tion tak­en. Form 8938 – State­ment of Spec­i­fied For­eign Finan­cial Assets This Form is used for tax­pay­ers to report their spec­i­fied for­eign finan­cial assets if the total val­ue of all the spec­i­fied for­eign finan­cial assets in which the tax­pay­er has an inter­est in is more than the report­ing thresh­old.  

U.S. Non-Resident Aliens

The fil­ing due date for indi­vid­u­als fil­ing Form 1040NR, U.S. Non­res­i­dent Alien Income Tax Return who did not have wages sub­ject to U.S. income tax with­hold­ing in June 17, 2019. The fol­low­ing Forms may be required to be filed if this is you. Form 1040NR, U.S. Non­res­i­dent Alien Income Tax Return There are a vari­ety of indi­vid­u­als who are required to file Form 1040NR each year, some of which include:

• If you were a non­res­i­dent alien engaged in a U.S. trade or busi­ness;
• You sold U.S. real prop­er­ty in 2018;
• You rep­re­sent­ed a deceased per­son who would have had to file Form 1040NR;
• You rep­re­sent­ed an estate or trust that had to file Form 1040NR;

Form 8840 – Clos­er Con­nec­tion Excep­tion State­ment for Aliens This Form is used to claim a clos­er con­nec­tion to a for­eign coun­try excep­tion to the sub­stan­tial pres­ence test.  

Non U.S. Based Entities

In accor­dance with U.S. domes­tic law, these are cer­tain for­eign cor­po­ra­tions and enti­ties with U.S. inter­ac­tions that are required to file a U.S. Cor­po­ra­tion Income Tax Return. If your busi­ness is locat­ed out­side of the U.S. but has busi­ness deal­ings with U.S. cus­tomers, you may be required to file Form 1120‑F. Form 1120‑F – U.S. Income Tax Return of a For­eign Cor­po­ra­tion A for­eign cor­po­ra­tion is required to file this Form to report income, gains, loss­es, cred­its, deduc­tions and to fac­tor in their U.S. income tax lia­bil­i­ties. Miss­ing the tax return fil­ing dead­line may mean hav­ing to pay penal­ties and inter­est for late fil­ing. You may also face a delay in receiv­ing any refund owed to you. U.S. Tax IQ’s accoun­tants have over 40 years of expe­ri­ence in tax law, and make the returns fil­ing process pain­less.

Very tru­ly yours, U.S. TAX IQ Team