U.S. citizens, resident aliens, and dual citizens living and working overseas, as well as U.S. military personnel stationed abroad, are required to file their 2022 tax returns by June 15, 2023. When submitting the return, taxpayers should indicate which circumstance applies to them. Various tax benefits such as the Foreign Earned Income Exclusion, Foreign Tax Credit, and child-related credits are available but only upon filing a U.S. return.
Taxpayers are obligated by federal law to report all global income, encompassing income from foreign trusts and bank and securities accounts. Filing usually involves completing Schedule B, Interest and Ordinary Dividends, and attaching it to their Form 1040 series tax return. Schedule B Part III involves declaring foreign accounts and the countries where they are located. Certain taxpayers may also need to submit Form 8938, Statement of Specified Foreign Financial Assets, if the cumulative value of these assets surpasses specific thresholds.
Furthermore, anyone having authority over foreign financial accounts whose total value exceeded $10,000 during 2022 must electronically file Form 114, Report of Foreign Bank and Financial Accounts (FBAR) with FinCEN. FinCEN offers an automatic extension until Oct. 15, 2023, for those who missed the April 15, 2023 FBAR filing deadline.
All foreign income, deductible expenses, and tax payments should be reported and remitted in U.S. dollars. The IRS and FINCEN require the use of a Dec. 31 exchange rate for all transactions. The IRS recommends paying taxes electronically for swift processing, with options available at IRS.gov/Payments.
If the June 15 deadline cannot be met, taxpayers can apply for an automatic six-month extension using Form 4868. The IRS advises making these requests electronically. Businesses requiring more time should use Form 7004. Additional extensions of at least 180 days may be available for military personnel stationed abroad or in combat zones during tax season. Spouses of those who served in combat zones or contingency operations are generally eligible for the same extensions, with some exceptions.
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