Physical present test of 330 days after filing for extension - is that ok?

[Taxmatters]

I am asking about a senior citizen who is US citizen. She has permanently moved to foreign country on May 29 2019 so if she file before April 15 2020 (Tax return deadline) she will not meet 330 days requirement ..she will be short by like 10 days.....

in that case can she file for extension ..so her deadline will be October 2020 and than she can meet 330 days requirement ?

is this ok to do ?

[LinaJ2020]

You would need to file a Form 2350 for your client.  This is a special extension form separate from the regular extension form Form 4868.  TurboTax does not support this form.  You would need to download the form from the IRS website.  Click here:https://www.irs.gov/pub/irs-pdf/f2350.pdf

[Taxmatters]

Thanks but she does not have foreign earned income and my understanding is that form you suggested is for foreign earned income exclusion.

I repeat if she files before April 15 ..she will not requirement of physical presence test (330 days in last 12 months) so wondering can we request for regular extension i.e. to extend until Oct. 2019? so that can she meet the physical present test before she files the tax return?

[KarenJ2]

If she has no foreign earned income, she does not need to meet the test to exclude it.  If she only has US income for 2019, she can file her 1040 as she always does reporting her US income as if she was living in the US.  She does not need an extension.

[Taxmatters]

She does not have US income or foreign income....she only has interest income from Indian bank which is less than 2.5k

[KarenJ2]

If you are referring to the Form 8938,please see the following;

As she is has not lived an entire calendar year abroad and she did not meet the 330 foreign presence test in 2019, she should use the filing requirement for individuals living in the US.  Her filing requirement for Form 8938 is as follow: 

Specified individuals living in the US: 

• Unmarried individual (or married filing separately): Total value of assets was more than $50,000 on the last day of the tax year, or more than $75,000 at any time during the year. 

• Married individual filing jointly: Total value of assets was more than $100,000 on the last day of the tax year, or more than $150,000 at any time during the year. 

For 2020 filing, she will need to follow the guidelines for specified individuals living outside the US if she is still living overseas. 

Comparison of Form 8938 and FBAR Requirements 

https://www.cpajournal.com/2018/10/23/fbar-filing-for-non-u-s-citizens/ 

[Taxmatters]

I believe you should read carefully before you respond to any question..if you considered expert than u have additional responsibility

[KarenJ2]

From Form 8938 page 4

Presence abroad. You satisfy the presence abroad test if you are one of the following. • A U.S. citizen who has been a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year. • A U.S. citizen or resident who is present in a foreign country or countries at least 330 full days during any period of 12 consecutive months that ends in the tax year being reported.

The tax year being reported is 2019.

[Taxmatters]

Anyone can read what is out there on internet particularly on IRS website but each question is unique and if u dont have capacity or time to read it carefully I suggest DONT RESPOND TO MY QUESTIONS..

[KarenJ2]

I apologize for the oversight on my part.  Yes, she can file an extension until October.  If she wants to use the June 15, deadline for taxpayers abroad, you need to also file Form 4868 and check the box that she is living outside the country. 

Then when she is preparing her return, she needs to add a statement that she qualifies for the June 15, 2020 extension.

Please note that interest still accrues from April 15 to June15, but not penalties.  So you would need to pay interest on any tax not paid from April 15, 2020 to June 15, 2020.   There is a statement in TurboTax that will be attached to your return to get the automatic June 15th extension.

In the search box enter extension, filing, additional and click the Jump to link.  You need to enter it exactly with the commas.  Click yes you want an extension and then on the next screen click that you want to prepare and out of country extension.  

In my previous response to you I was advising you that if she wishes to qualify for one of the foreign tests for Form 8938, the 330 day test must end in 2019 not 2020.  So for 2019 filing of Form 8938, she is considered a taxpayer living in the US.