A Playful Guide for Expatriate Tax Compliance

Ah, tax season. It's the time when global mobility professionals get to showcase our expertise in compliance while still juggling all the complexities of managing our international assignments. Assignees are working hard, immersed in new cultures, and it's up to us to keep them on the right side of the IRS. 

Let's dive into informative (and hopefully entertaining) guide to upcoming tax filing deadlines and essential considerations, sprinkled with insights from our previous discussions on mobility taxability and this article from Greenback Expatriate Tax Service. 

Key Tax Deadlines for 2024 taxes and 2025 taxes

By now, you have already supported 2023's tax season up to April 2024, dealt with any extensions (June 17, October 15, December 16) and coordinated any necessary estimated tax payments for Q4 2024, which were due on January 15, 2025. Looking toward the rest of the year:

• January 27, 2025: This is when the IRS begins accepting 2024 tax returns.
• January 31, 2025: This is the due date for employers to send W-2s.
• April 15, 2025: The regular 2024 tax filing deadline. Expats with significant foreign assets also file FATCA. April 15 is also the last day to make IRA and HSA contributions for tax year 2024. Oh, and Q1 2025 estimated taxes are due. It's a busy date!
• June 16, 2024: Expatriates residing outside the U.S. and Puerto Rico receive an automatic two-month extension to file their federal tax returns. However, this extension doesn't apply to tax payments, which are still due by April 15. Additionally, Q2 2025 estimated tax payments are due on June 16. 
• September 15, 2025: Q3 2025 estimated tax payments are due.
• Year-end cutoff: Enter the date for your program here. Many mobility programs use October 1, November 1, or December 1 as cut-off dates to roll over expenses into the next tax year to allow for collection calendars to be more manageable.
• October 15, 2025: For those that needed 6 months additional time, filing Form 4868 granted an extension to this date. Remember, while the paperwork can wait, the payments cannot.
• January 15, 2026: This is when Q4 2025 estimated tax payments are due.

Strategic Tax Planning

Reflecting on our previous tax discussions, here are some other strategic tips for keeping your program compliant.

• Evaluate Your Program: Regular assessments ensure your policies align with current tax laws and best practices. Collaborate with your immigration and relocation management partners to identify areas for improvement.
• Create a Framework for Global Expansion: Establish defined policy approaches, formalized payroll processes, and secure the right partners to support compliance from start to finish.
• Choose the Right Assignment Structures: Strategically advise your organization on the best ways to support talent globally, considering the tax implications of various assignment types.
• Build a Strong Foundation for Your Mobility Tax Program: This includes proper budgeting, having a tax policy in place, aligning internal stakeholders, establishing communication channels, providing tax counseling for relocating employees, and effectively tracking and reporting global payroll expenses.
• Equip Your Mobile Employees for Tax Season: Provide guides, articles, checklists, and prompts well in advance of tax season to prepare your expatriates for smooth filings.
• Plan Ahead to Conquer Tax Season: Develop documented processes and calendars for the year, hold kickoff meetings as processes start, and evaluate results to identify areas for adjustment.

The Alphabet Soup: FBAR and FATCA

Two acronyms every mobility professional should be familiar with:

1. FBAR (Foreign Bank Account Report): If your expatriates have over $10,000 in foreign accounts at any point during the year, they must file FinCEN Form 114 by April 15, 2024. An automatic extension to October 15 is available if needed.
2. FATCA (Foreign Account Tax Compliance Act): Depending on filing status and residency, expatriates with significant foreign financial assets need to file Form 8938. Ensure your tax partner is on top of these requirements.

Quarterly Estimated Tax Payments: A Refresher

Although included above, we remind you that for expatriates who anticipate owing at least $1,000 in taxes for the year, quarterly estimated tax payments are (likely) required. The 2025 deadlines are:

• April 15
• June 16
• September 15
• January 15, 2026

Timely payments help avoid underpayment penalties and keep your program running smoothly.

Pro Tips for a Smooth Tax Season

• Maintain Open Communication: Foster transparent communication between your expatriates, tax partners, and internal teams to ensure no detail is overlooked.
• Stay Organized: Encourage expatriates to keep all financial records in order. A well-organized digital folder can be a lifesaver.
• Leverage Expertise: Rely on your tax partners to navigate the complexities of international tax laws, allowing you to focus on broader mobility strategies.

While tax season may not be the most glamorous aspect of global mobility, your proactive approach and strategic planning ensure your expatriates remain compliant and stress-free. With the right preparation and partnerships, you'll navigate the tax season with ease, leaving more time to focus on the exciting aspects of global assignments.

Note: Tax laws and deadlines can change. Always consult with your tax partners or the latest IRS guidelines for the most current information.