Form 2350 Application for Extension of Time To File U.S. Income Tax Return

Form 2350 Extension for Special Tax Treatment

Form 2350 Extension for Special Tax Treatment: When it comes to having to file an IRS extension for a US tax return there are three main forms a taxpayer has to contend with — Form 2350, Form 4868 and Form 7004. Depending on the which type(s) of international reporting forms a Taxpayer may be required to file — they may have to file multiple different forms in the same year in order to ensure that they receive an extension for their entire tax portfolio. While the form 4868 and 7004 are relatively straightforward and simply involve an extension of time to file either a tax return or other form — the Internal Revenue Service Form 2350 is more complicated and specifically refers to U.S. Citizens and Resident Aliens abroad who may qualify for special tax treatment. Let’s review the differences between forms 2350, 4868 and 7004:

Form 2350 Application for Extension of Time to File U.S. Income Tax Return

Form 2350 is an extension form for certain US Taxpayers who plan on filing Form 2555 (Foreign Earned Income Exclusion aka FEIE ) but require additional time in order to qualify for the Bona-Fide Residence Test (BFR) or the Physical Presence Test (PPT) — Taxpayers must qualify for either/or in order to qualify for FEIE). The form is filed by mail to the location in Austin  — although the IRS does permit taxpayers to drop off the form with a local IRS representative.

What is Required to be Included on Form 2350?

The Form 2350 require the following information:

• • • I request an extension of time until to file my income tax return for the calendar year 2020, or other tax year ending, because my tax home is in a foreign country and I expect to qualify for special tax treatment by meeting the “bona fide residence test” or the “physical presence test.” (See instructions.)

    • Were you previously granted an extension of time to file for this tax year? Y/N

    • Will you need additional time to allocate moving expenses? Y/N

    • Date you first arrived in the foreign country

      • Date qualifying period begins & ends

      • Your foreign home address

      • Date you expect to return to the United States

    • Note: This is not an extension of time to pay tax. Full payment is required to avoid interest and late payment charges. 5 Enter the amount of income tax paid with this form

When is Form 2350 Due?

The Form 2350 is due on or before aTtaxpayer is required to file their form 1040.

As provided by the IRS:

• • • File Form 2350 on or before the due date of your Form 1040 or 1040- SR. For a 2020 calendar year return, this is April 15, 2021. However, if you have 2 extra months to file your return because you were “out of the country” (defined next), file Form 2350 on or before June 15, 2021. You should file Form 2350 early enough so that if it isn’t approved, you can still file your return on time. “Out of the country” means that on the regular due date of your return, either

      • you live outside the United States and Puerto Rico and your main place of work is outside the United States and Puerto Rico, or

      • you are in military or naval service on duty outside the United States and Puerto Rico.

      • If you qualify as being “out of the country,” you will still be eligible for the extension, even if you are physically present in the United States or Puerto Rico on the regular due date of the return.

      • You don’t have to file a form to get the 2-month extension because you were out of the country. But you will have to attach a statement to your tax return explaining how you qualified.

Not an Extension to Pay Taxes

As with any extension form to file a tax return, it does not extend the amount of time necessary to pay taxes. If taxes are not paid timely — then the Taxpayer will be subject to potential penalties and interest:

• • • Form 2350 doesn’t extend the time to pay taxes. If you don’t pay the amount due by the regular due date, you will owe interest. You may also be charged penalties.

    • Interest. You will owe interest on any tax not paid by the regular due date of your return, even if you qualify for the 2-month extension because you were out of the country. The interest runs until you pay the tax. Even if you had a good reason for not paying on time, you will still owe interest.

    • Late Payment Penalty. The late payment penalty is usually ½ of 1% of any tax (other than estimated tax) not paid by April 15, 2021 (for a calendar year return), or June 15, 2021, if you have 2 extra months to file your return because you were out of the country. It is charged for each month or part of a month the tax is unpaid. The maximum penalty is 25%. You might not owe this penalty if paying late is due to reasonable cause and not due to willful neglect. Attach a statement to your return, not to the Form 2350, explaining the reason.

    • Late Filing Penalty. A late filing penalty is usually charged if your return is filed after the due date (including extensions). It is usually 5% of the tax not paid by the regular due date for each month or part of a month your return is late. Generally, the maximum penalty is 25%.

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