How to File Late US Expat Taxes Without IRS Penalties

Falling behind on US taxes is surprisingly common for Americans living abroad. Many expats unintentionally miss their filing obligations due to a lack of awareness, confusion over foreign income rules, or the assumption that local taxes are enough.

Fortunately, late filing doesn’t have to result in a huge tax bill or long-term consequences, especially if you act promptly. In this article, we’ll walk through the key expat tax deadlines and outline the steps you can take to get your US expat taxes back into compliance, often without IRS penalties.

Do Americans Abroad Still Have to Pay US Taxes?

Yes, US citizens and Green Card holders must file a US tax return annually, reporting their worldwide income, no matter where they live. This citizenship-based tax system often catches US expats off guard, assuming their tax obligations ended when they moved abroad. While you may not end up owing US taxes thanks to Key IRS provisions, filing is still mandatory.

Key Expat Tax Deadlines

So, what are the deadlines to avoid getting behind in the first place? When it comes to US expat taxes, understanding the key deadlines can help you avoid unnecessary IRS penalties and interest.

• April 15 is still the main tax deadline to pay any taxes owed. Even if you live abroad, the IRS expects payment by this date. Missing it may trigger interest and late payment penalties.
• June 15 is the automatic filing extension granted to Americans living overseas. You do not need to submit a form, but you will start accruing interest on unpaid US expat taxes after April 15.
• October 15 becomes your next deadline if you file Form 4868 for an additional extension by June 15th.
• December 15 marks the final possible tax filing extension for US expats. You must submit a written request by the October 15th due date, provided you have that extension.

Note: All of these extensions apply to filing, not payment. To avoid IRS penalties and interest, you must pay any taxes due by April 15, even if you’re living abroad.

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IRS Penalties for Filing Late

Missing a US tax deadline can lead to two main types of IRS penalties: the failure-to-file penalty and the failure-to-pay penalty.

• Failure-to-File Penalty: If you miss the deadline to submit your return or fail to request an extension, the IRS charges 5% of your unpaid taxes per month, up to a maximum of 25%. Even a one-day delay can trigger this penalty.
• Failure-to-Pay Penalty: If you don’t pay your tax bill by the due date (typically April 15), the IRS charges 0.5% per month on the unpaid amount and caps it at 25%, until the balance is paid in full.

These penalties can add up quickly. In addition, informational forms, such as the FBAR or Form 5471 for reporting foreign corporations, can carry IRS penalties of up to $10,000 per form per year.

IRS Amnesty Program for US Expats

So what if you didn’t know you had to file and are now years behind? The IRS created the Streamlined Filing Compliance Procedures to help Americans abroad catch up on their taxes without facing penalties, provided their non-compliance was unintentional. This may be your best option if you haven’t filed US taxes since moving abroad.

To get back on track, eligible expats must:

• File the last three years of tax returns
• Submit six years of Foreign Bank Account Reports (FBARs), if required

Even if you’ve lived abroad much longer, you only need to file the past three tax years to qualify. The process is designed to bring non-willful filers into full compliance, without triggering penalties.

Who Qualifies for Streamlined Filing?

You may be eligible for this amnesty program if:

• You did not maintain a primary residence in the US
• You spent at least 330 days abroad in one of the last three years
• Your failure to file was due to non-willful conduct
• You are currently non-compliant (e.g., you missed one or more returns or FBARs)

The Streamlined Procedure is one of the most effective ways to become compliant and protect yourself from IRS penalties.

Why Many Expats Don’t Owe US Taxes

The best news? Many US expats don’t end up owing any taxes at all, thanks to IRS tax benefits designed to prevent double taxation.

The Foreign Earned Income Exclusion (FEIE) allows US expats to exclude up to $126,500 for the 2024 tax year in foreign income from their US return, while the Foreign Tax Credit (FTC) lets you reduce your US tax liability by the amount of income tax you paid to a foreign government.

Depending on your situation, you may even qualify for refundable credits, such as the Child Tax Credit, which could result in money back from the IRS.

One additional benefit of the IRS amnesty program: you can claim these tax breaks retroactively, often significantly reducing or wiping out your US tax liability altogether.

If You Do End Up Owing Taxes

Even if you end up owing US taxes, there are manageable solutions. The IRS allows expats to make partial payments and apply for a payment plan using Form 9465

Starting a payment plan can reduce IRS penalties and interest, and paying even a small amount shows good faith and helps you stay on track.

Don’t Delay, Catch Up with Confidence

Falling behind on your US expat taxes doesn’t have to mean stress or a huge tax bill. The IRS amnesty program offers a clear, penalty-free path to get back on track. The process is more straightforward than you might think, especially with trusted Tax Professionals like MyExpatTaxes.

Whether you’re filing for the current year or catching up on missed returns, our award-winning, user-friendly software and unparalleled support make it easy to stay compliant. Maximize your expat tax benefits, avoid IRS penalties, and confidently enjoy life abroad.

Frequently Asked Questions (FAQ)

What happens if a US expat doesn’t file taxes?

You may face late filing IRS penalties and miss out on valuable tax breaks that often wipe out any tax liability. Depending on your situation, you may even qualify for refundable credits like the Additional Child Tax Credit. Even if you don’t owe taxes, filing is the only way to claim these benefits and stay compliant.

What if I owe taxes but can’t afford to pay all at once?

You can apply for a payment plan using IRS Form 9465. Even partial payments help reduce penalties and interest and show the IRS that you’re making an effort to comply.

Do US expats have to pay taxes if they already paid foreign taxes?

Often, no. Most US expats won’t end up owing any US taxes. IRS benefits like the FEIE and FTC can often eliminate your US tax bill on foreign income. Additionally, many countries have tax treaties with the US that help prevent double taxation on certain types of income.

What if I’m only behind on FBARs?

If you’ve reported all your foreign income on past tax returns and the IRS hasn’t contacted you, you can use the Delinquent FBAR Submission Procedures to file late FBARs without penalties. MyExpatTaxes can also support you in this procedure for an affordable fee.