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The Difference Between Form 4868 and Form 2350

The Difference Between Form 4868 and Form 2350
Ines Zemelman, EA
22 September 2021

One of the benefits of living overseas is that, while Americans in the United States rush to do their taxes by April 15, expats are given an automatic two-month extension. Of course, this might not be enough to find all of the necessary information. That is why many Americans living in other countries apply for an extension until October 15 or December 15.

But how can you know which extension is best for you? We point out the differences between being able to file extension Form 4868 vs Form 2350 in this post to assist you in selecting the extension that best suits your expatriate tax needs.

What is the differences between the two forms?

What is Form 4868? What is Form 4868 used for? Form 4868 is used for requesting for a normal extension until October 15.

On the other hand, IRS Form 2350 is designed to aid new expatriates in qualifying for the Foreign Earned Income Exclusion. You must meet specific criteria to use Form 2350, so keep reading to discover more about the distinctions between the two expat tax extensions.

A quick overview of tax extensions for us expatriates

June 15: Automatic Extension

Taxpayers who live outside the United States are granted an automatic two-month extension to complete their personal tax return and FBAR. This pushes the deadline back to June 15. To have this extension of your tax return, no documentation is required. Still, you must specify on your tax form that you were residing outside of the United States to avoid fines.

October 15: Standard Extension with the Use of Form 4868

If you need extra time to file after June 15, you can submit Form 4868 and request an extension through October 15. This also contains an FBAR extension.

December 15: Special Extension with the Use of Form 2350 or IRS Approval

Form 2350 can be used by US expats who require more time to be eligible for the Foreign Earned Income Exclusion. Americans living abroad can obtain an arbitrary two-month extension from the IRS if they just need more time to organize their tax returns after the October 15 extension—but they will not require Form 2350.

Utilizing Form 2350 to be eligible for the foreign earned income exclusion

You may be eligible for special tax breaks if you just relocated outside of the United States. If you file Form 2350 before your tax return's deadline, which is June 15, if you are out of the country, you will be granted an additional two-month extension beyond the standard extended filing date of October 15.

Tax Form 2350 is a special extension for Americans living overseas who want to submit Form 2555 (Foreign Earned Income) but need more time to fulfill the Physical Presence Test or the Bonafide Residence Test to be eligible for the Foreign Earned Income Exclusion. In other words, solely because you are a new expat, you may qualify for more filing time. Please keep in mind that you can only file Form 2350 once for each foreign move.

If your request for an extension is approved, you will usually have 30 days to file after passing either of the two tests. You will not receive a notification that the extension has been granted; however, the IRS will notify you if the extension has been denied.

Requesting an extension to December 15 without the use of Form 2350

Even though you're not a new expatriate, taxpayers residing abroad who need extra time to file their tax return after the October 15 deadline can request a discretionary two-month extension. You must have filed Form 4868 for the October 15th regular extension by June 15 to be eligible for this extension.

If you meet this requirement, you must write to the IRS before the October 15 deadline, requesting and communicating why you need an extra two-month extension. One example is you are awaiting documentation related to an investment or if your host country's taxation will not be readily accessible to meet the deadline.

The IRS will notify only individuals who have been denied a discretionary extension. If you haven't heard from the IRS, you can safely assume that the extension has been granted. Those who applied for any other specialized extension, including Form 2350, are not eligible for the discretionary two-month extension. NOTE: FBAR is not included in this.

To be considered for a December extension, your letter must be postmarked by October 15 and sent to:

Department of the Treasury

Internal Revenue Service Center

Austin TX 73301-0045

Take note that discretionary extensions are not guaranteed

This final December extension is regarded as discretionary, which means that people are not assured an extra two months merely by requesting it. You'll need to provide a convincing explanation in your letter for why you're taking so long to finish your expatriate tax return.

Keep in mind that if you requested your initial October extension using Form 2350 rather than Form 4868, you would not be entitled to this two-month extension.

What if I owe money on my tax return as an expat?

It's crucial to realize that filing extensions are not extensions of time to pay your taxes. Even if you successfully submit an extension, you will be subject to fines and interest if you have a balance outstanding and file your return beyond the original due date. If you owe taxes, you must pay them by April 15, or interest will begin to accrue until the taxes are paid.

What happens if I don’t file a request for extension or if my request is rejected?

Your return will be late if you do not seek an extension for more time or if your extension is disallowed. You might be levied interest on the taxes you owe, as well as a penalty for failing to pay and failing to file (up to 25 percent of your tax due). If you require additional time, you must obtain an extension as soon as possible. If you owe taxes, you must make a payment to the IRS as quickly as possible to avoid interest and penalties.

Ines Zemelman, EA
Founder of TFX