The IRS tax calendar is approaching a significant deadline on June 17, requiring three significant tax payments. These deadlines are especially relevant for taxpayers, ensuring compliance with tax obligations to avoid penalties and maintain financial stability.
The first important date is for those American presidents and holders of Green Cards who live abroad. Despite the summer typically being seen as a break from tax concerns, June 17 marks the deadline for U.S. citizens living abroad to file their tax returns with the IRS.
A Complex Tax Filing For Those Living Abroad
This obligation is not tied to residency but rather citizenship, necessitating the reporting of income sources like salaries, dividends, and rental earnings even while abroad.
The complexity arises from factors such as foreign income, tax treaties, and potential double taxation. For instance, taxpayers may need to submit Form 114 (FBAR) to disclose foreign financial accounts to the U.S. Treasury Department.
Compliance is vital as there are tax benefits for Americans abroad, including income exclusion and various tax credits. Keeping up with these filings ensures legal adherence and access to tax relief measures such as refunds or tax credits.
Estimated Tax Payments
Quarterly estimated tax payments are crucial for taxpayers with income not subject to standard withholdings. The second quarterly payment, due on June 17, underscores the need to accurately project annual income, deductions, and credits for precise calculations.
Form 1040-ES simplifies this process with worksheets and detailed guidance, aiding in evenly spreading the tax burden throughout the year and avoiding penalties.
Form 1040-ES is used by individuals to calculate and pay estimated taxes on income that isn’t subject to withholding. This includes earnings from self-employment, interest, dividends, alimony, rent, and gains from the sale of assets. Essentially, it ensures that taxpayers meet their tax obligations throughout the year instead of waiting until the annual tax return is filed.
Taxpayers must use a Form 1040-ES if they expect to owe at least $1,000 in tax after subtracting their withholding and refundable credits. The IRS will also require it if they expect their withholding and refundable credits to be less than the smaller of:
- 90% of the tax to be shown on their current year’s tax return.
- 100% of the tax shown on the previous year’s tax return (assuming the previous year’s tax return covered all 12 months).
Tax Filing Extensions for Disaster-Affected Areas
The final date to file tax returns and submit payments has also been set for June 17 for seven states affected by various natural disasters such as storms, floods, tornadoes, and others. The list of states, counties and tribal territories covered by this extension is as follows:
- California: San Diego County.
- Connecticut: New London County and the Mohegan and Mashantucket Pequot tribal nations.
- Michigan: Eaton, Ingham, Ionia, Kent, Livingston, Macomb, Monroe, Oakland and Wayne Counties.
- Maine: Androscoggin, Franklin, Kennebec, Oxford, Penobscot, Piscataquis and Somerset Counties.
- Tennessee: Cheatham, Davidson, Dickson, Gibson, Montgomery, Robertson, Stewart, Sumner and Weakley Counties.
- Washington: Spokane County and Whitman County.
- West Virginia: Boone, Calhoun, Clay, Harrison, Kanawha and Roane Counties.