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2021 Taxpayer Planning: U.S. Citizens and Resident Aliens Abroad


For a U.S citizen or resident alien, the taxpayer’s income earned worldwide is subject to U.S. income tax, regardless of whether the taxpayer resides in the United States or abroad.


U.S. Individual Income Tax Return Filing Requirements

The original deadline to file is April 15th, and an automatic 2-month extension to file and pay taxes by June 15th may be granted if the taxpayer meets one of the following conditions:

  • The taxpayer resides outside the United States and Puerto Rico and his/her main location of business or post of duty is outside the United States and Puerto Rico.

  • The taxpayer is in military or naval service on duty outside the United States and Puerto Rico.

However, the 2-month extension does not eliminate the interest charges on any unpaid tax. Interest will be charged from the original due date of the return on any unpaid tax. A statement must be included to show that the taxpayer meets the requirements for the 2-month automatic extension.

If additional time is needed, the taxpayer can apply for 6-months extension using Form 4868 to extend the deadline to file the tax return to October 15th.


Tax Payment Due Date

Any tax owed on the taxpayer’s income tax return must be paid by April 15th.


COVID-10 Travel Disruption Relief

The IRS has offered individuals and businesses with relief in connection with travel disruptions arising from the COVID-19 pandemic. Under the relief, U.S. presence arising from travel disruptions due to the COVID-19 pandemic will not be taken into consideration for purposes of determining U.S. tax residency and for purposes of determining whether an individual is qualified for tax treaty benefits for income from performing personal services in the United States.


Exchange Rates

All amounts reported on the U.S. tax return must be in U.S. dollars. If part of the taxpayer’s income or expenses is in foreign currency, the taxpayer must translate the foreign currency into U.S. dollars.


Taxpayer Identification Number

Any taxpayer who files or is claimed as a dependent on a U.S. tax return will need a social security number (SSN) or individual taxpayer identification number (ITIN).


Nonresident Alien Spouse Treated as a Resident

Generally, if either spouse is a nonresident alien at any time during the year, a joint return cannot be filed. Yet, if one spouse is a citizen or resident of the United States, both spouses can file an election to treat the nonresident alien spouse as though he or she was a resident of the United States throughout the year, hence permitting them to file a joint return. Both spouses will be subject to tax on their worldwide income if the election is made. To make the election, a statement must be attached to the tax return. The election remains in effect to all subsequent years until terminated by revocation, death, separation or divorce, or termination by the IRS for failure to keep adequate records. Once the election is terminated, the couple may not make the election again.