A: An automatic two-month extension for filing an income-tax return and paying the tax is given to U.S. citizens residing outside the U.S. In order to qualify, you must be living outside the U.S. and your main place of business must be outside the country, or you must be in military service on duty outside the U.S. when the return comes due. You must attach a statement to your tax return explaining which of the two situations qualify you for the automatic extension.
If a citizen is merely traveling abroad on the due date of the original return, there is no special relief from filing the extension on time. If the taxpayer does not meet one of the requirements for automatic extension, he would be required to pay the tax plus any interest and penalties. If the taxpayer does qualify for the automatic extension of two months and needs additional time, then he must file Form 4868 to get an extra two months' grace. Also, he should write "Taxpayer Abroad" at the top of his tax return when he does file it.
The additional two-month extension (unlike the initial two-month extension, which is automatic) does not extend the time for payment of the tax. For further information, IRS Publication 54 discusses the filing rules for citizens abroad.
Lawrence N. Frankel, CPA
West Orange, N.J. Editor's note: While the information in Tax Adviser represents the opinion of an expert, it is not legally binding. Do you have a small-business tax question? Tax professionals will answer your questions in the Tax Adviser column. E-mail Taxadviser@businessweek.com. We will not print your name, address or phone number, but please provide this information.