Should You File a Tax Extension?

The U.S. tax deadline is April 15, but if you’re an Australian expat who hasn’t secured a CPA firm or filed independently yet, you can request a six-month extension until October 15. However, keep in mind:

Extension to File, Not to Pay

You’ll still need to calculate tax owed and pay it. The extension simply allows more time to prepare and file the tax return. Any taxes owed still accrue interest from April 15.

Estimate Your Tax Liability

Use an online tool or calculator to get a rough estimate of your tax liability. If you overpay when making your extension payment, the IRS will refund the excess when you file your completed return.

State Extensions

Depending on which state you live in, you may need to file an extension there too. While some states automatically grant an extension when you file a federal extension, others have specific rules. In some cases, a state may reject the automatic extension if you owe a significant amount of state taxes. To avoid unexpected issues, it’s crucial to ensure that either an extension is filed or that taxes are paid by the deadline.

Concluding Thoughts

Australian expats should seek out a CPA firm as early as possible to ensure their tax returns are filed on time and avoid needing to request an extension. Given that international tax is a niche area, many well-regarded firms are fully booked by late January or mid-February each year. If an extension becomes necessary, expats should keep in mind that it only provides extra time to file, not to pay. To prevent accruing interest, it’s crucial to either estimate your tax liability yourself or to work with an accountant before tax season begins to ensure the extension payment is correct.

Note: This is general information, not legal or tax advice. Consult a professional for personalized guidance.