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New Earlier U.S. Tax Filing Deadlines

Who has exposure to the U.S. tax authority?

Personal income tax returns are due April 18 for US tax residents and anyone else with U.S. source income, except certain taxpayers living abroad have until June 15.  US tax residents include citizens and permanent residents (i.e. “green card” holders), regardless of their circumstances or other nationality, as well as persons who spend too much time in the U.S. (in some cases even less than 183 days). These tax returns must include not only worldwide income, but also information regarding many direct or indirect connections with foreign companies, trusts and financial assets. Some gifts or inheritances received from foreigners must also be reported. Individuals may request an automatic extension until October 16, but an estimated tax payment must be made with the extension, and there are penalties for underestimating. March 15 is the new deadline to file most LLC income tax returns for the 2016 tax year. Most Corporations and some LLCs taxed as Corporations have until April 18, unless they are “S” Corporations. Deadlines for payroll related reporting begin as early as January.

NOTICE: Starting this year, the deadline to report economic interest or signature authority on foreign accounts is now on April 18th instead of June 30th.

Sometimes Reporting is the Best Way to Avoid Paying

Some of these deadlines also apply to certain forms that must be filed to claim an exception from being treated as a U.S. tax resident. These exceptions include having a “closer connection” to another country, being present in the U.S. under certain visas or for certain medical reasons, and pursuant to certain income tax treaties (e.g. Mexico, Venezuela, etc.), all of which require a timely filing to qualify. The penalty for not filing on time is generally being treated like a tax resident anyway, and therefore reporting and paying tax on a worldwide basis.

Avoid Penalties and Headaches by Getting it Done Right and on Time

Multinational families with U.S. investments or a member who is or might become a U.S. tax resident, and who have not received current legal advice regarding their wealth from an experienced, independent and practicing U.S. international tax attorney, should act quickly to ensure that their wealth is properly structured for maximum tax efficiency and legal advantage. Anyone unsure whether they have fulfilled all their tax and information reporting obligations should seek the privileged advice of a tax attorney as soon as possible to determine the safest and most economical way of resolving their non-compliance prior to detection.

Get the Help You Deserve

Regardless of your situation, it’s time to prepare your 2016 tax returns or at least request any available extensions. If you don’t have a good tax advisor that understands the complexities of international tax law, contact us ASAP to see how our multidisciplinary team of attorneys and accountants can help.