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It’s already Sunday afternoon and I haven’t even started on this article (and many other projects). The tax accounting business is keeping me busy. Well, sort of busy. Were I truly busy, I wouldn’t be here poking at my tablet’s virtual keyboard.
As I hunt and peck, I’m trying to make the best of a tax season phenomenon – the time of famine or feast. At this time of the season, there is either no tax information coming in from clients still needing to file their tax returns (the famine) or there are massive, mega-dumps of information clogging my inbox from those wanting next-day turn-around on their returns (the feast).
So, while I sit and hunger for more work, I’ll jot down some ideas and try to magically transform them into an article. (It appears that I also need to make an appointment with the dietician concerning my strange appetite and feeding habits.)
Here are some bits and pieces of things running through the old gray matter.
ON THE TAX SCENE
A question keeps popping up almost daily from “Expats” and “Expat Wannabes” regarding U.S. Income Tax return filing obligations and deadlines. They sort of morph into something like, “Since I’m living outside of the U.S., I shouldn’t have to file an income tax return but, if I do, I heard that ‘Expats’ have an automatic extension until October. What’s up with that?”
As for U.S. Income Tax return filing requirements:
- All “U.S. Persons” for income tax purposes are required to file an annual income tax return and pay any associated income tax.
- A “U.S. Person” for individual income tax purposes is a U.S. citizen, a U.S. resident alien (“Green Card” holder), or a U.S. nonresident alien who has income sourced from the U.S.
- Citizens and resident aliens must report, and pay income tax on, all income they have received during the tax year, regardless of its source – “worldwide income.”
- Nonresident aliens must report, and pay income tax on, all income they have received during the tax year from sources within the U.S.
- Taxpayers have this obligation regardless of where they reside, so “Expats” must file an annual income tax return.
As for filing deadlines:
- All income taxes must be paid on or before the 15th day of the 4th month following the end of the taxpayer’s tax year with no exceptions – for most individuals, that is April 15th.
- Taxpayers whose “tax home” is within the U.S. or Puerto Rico must file their income tax returns on or before the tax payment due date – again, for most, April 15th. If additional time is required to file a complete and accurate return, these taxpayers may request an extension of time to file their returns. This extension is for 6 months, moving their filing deadlines to the 15th day of the 10th month following the end of their tax year – again, for most, October 15th.
- Taxpayers whose “tax home” is outside of the U.S. and Puerto Rico also have the same income tax return filing deadline as other taxpayers – again, for most, April 15th. However, if they are outside of the U.S. and Puerto Rico on that date, they are given an automatic 2-month extension of time to file their income tax returns AND pay their income taxes without incurring a penalty assessment. Those paying their income taxes between the original deadline and the automatically extended deadline will be assessed interest charges for each day between the original deadline and their date of payment. Paying income taxes after the automatically extended deadline will result in the taxpayer incurring both interest AND penalty charges.
- A “tax home” is the place of residence that the taxpayer has established for conducting business and paying obligations, such as taxes.
- If a taxpayer enjoying the automatic 2-month extension requires additional time to file a complete and accurate tax return, the taxpayer may request an extension to file, similarly to others requesting extensions of time to file. Their “follow-on” extension is for 4 months, bringing them in line with other taxpayers.
There’s no easier way to explain the ins and outs of this topic. If you have the same question bothering you, read and re-read the above until the little light comes on. That’s the only way you’ll get it.
INTERNET SPEEDS IN THE PHILIPPINES
A short piece here regarding the horse I seem to be beating to death lately. Relax, though. It’s about something that you and I can’t control. But it is newsworthy.
Internet speeds in the Far East have been hampered for the past few months due to a couple of breaks in undersea communications cables. Though Internet service providers have been busy with “workarounds” and re-routing their links to off-shore trunk terminals, speeds and latency issues still abound. This time, it’s not the service provider’s fault (at least, it’s not their fault for the most part).
While some service subscribers are enjoying their average or better speeds, low or negligible byte losses, and respectable latency reports, most others still feel the sting – yours truly included.
GOOD NEWS! Complete repair of the breaks and return to full service is projected for the middle of April. (~17th). So, get your speed test software and/or speed test favorites in your browser up to date and ready. I’m sure that everyone will be testing and loading down the bandwidth for the first few days. But have hope. Broadband speed service will reappear in the Philippines.
I’ll keep my fingers crossed anyway, just in case ………