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IRS is warning millions of taxpayers about approaching deadline that many are expected to miss

IRS Warns Millions of Taxpayers: More than eight million U.S. citizens and green card holders live abroad, but only a fraction file annual tax returns with the IRS, about $500,000, to meet their tax obligations.

Can you tell me who falls into this category of taxpayers?

To determine whether someone abroad qualifies as a U.S. taxpayer, the IRS uses the physical presence test.

As an important aspect of this test, it is not required that the 330 days be consecutive; the tax authorities are only looking for people who have spent that amount of time outside the country during a year.

Will passing the test hurt my career?

IRS reports that the test is not intended to track taxpayers abroad, and that it “does not depend on where you live, whether you plan to return, or what purpose you have for being abroad.”

Extensions are granted automatically

U.S. citizens living abroad are, contrary to popular belief, not exempt from reporting to the IRS. Failure to file a tax return may result in fines and other legal consequences.

An automatic extension of two months per year applies to this group. This year, the filing deadline was extended to June 17, leaving less than a month to file.

By filing this form with the IRS, taxpayers living outside the US can still request an extension through October 15, 2024.

Generally, U.S. citizens or residents who live or travel outside the United States are required to file income, estate, and gift tax returns and pay estimated taxes.

Is it possible to deduct foreign income from US taxes?

Income earned abroad, that is, income that does not come from a US employer, may be taxed differently than income earned in the US. For example, many who live abroad may have income earned abroad.

For the tax year (fill in the year), the IRS would tax a maximum of $120,000 ($240,000 for married couples filing jointly and both reporting foreign income) on this type of income.

Your income earned abroad may not be subject to U.S. taxes if it falls below this threshold. However, the IRS still requires you to report this.

Also read: Time is running out to apply for $1 billion in unclaimed stimulus checks and IRS credits

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