For the estimated 5-9 million American citizens abroad, June 16, 2025, is a critical date to file 2024 federal tax returns and forgo substantial penalties. Although the IRS provides an automatic two-month extension to expats, this ultimate deadline will lead to doubling of penalties for late filing, missed taxes, and missed foreign financial account reporting. With only days left, taxpayers need to move quickly to sort through intricate reporting guidelines, take advantage of critical exclusions, and prevent expensive legal consequences.
The June 16 deadline: Who is eligible and why it is important
American expats are eligible for the special June 16 deadline if their home or work location is outside of the United States or Puerto Rico, or if they work abroad in the U.S. armed forces. Expats, unlike domestic filers, must exercise citizenship-based taxation, that is, they must report all income worldwide, including foreign wages, investments, and rental income, no matter what local taxes are owed. This failure to pay causes a 5% penalty every month that is immediate on unpaid tax, up to 25%, in addition to 0.5% monthly late-payment penalties and 8% yearly interest.
Critically, payment rather than filing is delayed in the June extension. 2024 liabilities were payable on April 15, 2025, so even with a valid extension, balances accrue interest on a daily basis. Expats who underestimated liabilities will face compounding penalties, passport seizure, or asset forfeiture if the IRS determines noncompliance was willful.
Avoiding double taxation: Exclusions and credits
To avoid double taxation, expats can use the Foreign Earned Income Exclusion (FEIE), which excludes foreign-earned income up to $130,000 in 2025—a $3,500 boost from 2024. When combined with the Foreign Tax Credit, it permits dollar-for-dollar crediting of taxes paid to source countries, usually eliminating U.S. liabilities altogether. But with good comes evil: those who miss the June 16 cutoff lose the cover and are taxed on worldwide income.
Recent statistics from the IRS show that 62% of expats owed no U.S. taxes during 2016–2021 due to these provisions. And 77% are earning under $100,000 annually, demonstrating how correct filing opens important savings with modest pay.
The hidden risks of informational reporting
Besides disclosing income, expats need to disclose FBARs (FinCEN Form 114) for foreign accounts over $10,000 total at any point in 2024. Standalone forms such as Form 8938 (foreign assets) and Form 5471 (foreign corporate investments) have $10,000-per-transgression automatic penalties that are indifferent to tax obligation. These requirements ensnare many into non-compliance: a 2025 Treasury report concluded that 40% of expats were underreporting financial accounts and faced six-figure fines.
Strategic extensions and payment options
Expats who wish to have more time may submit Form 4868 on June 16 to bring forward their filing deadline to October 15, 2025. Payment deadlines are not postponed with it, though. The IRS accepts a number of payments from overseas, including:
- Direct Pay from US bank accounts
- Wire transfers in local currency
- Credit/debit card payments (subject to 1.87%–3.93% processing fees)
Partially pay filers who are unable to pay in full make down payments to minimize interest and settle installment agreements at filing.
Express actions prior to June 16
- Collect documents: Collect 2024 income statements, foreign tax returns, and bank statements.
- Compute FEIE/FTC eligibility: Utilize IRS worksheets or computer programs to optimize exclusions.
- File electronically: Electronic filing speeds up processing and gives proof of filing.
- Seek professionals: Expatriate return-preparation companies can simplify complicated filings and find missed deductions.
With fines mounting on a daily basis, expats should view June 16 as more than a far-off deadline, but the last chance to remain in financial good health. “The IRS has little patience for missed deadlines—no matter how innocent an error,” says cross-border tax specialist Laura Dallo. “Filing now, even with estimates, is always preferable to silence.”
Read more: IRS Form 1099-DIV in 2025: what is it, instructions, how to fill it out and where to apply for Dividends and Distributions
Read more: Millions of American children could lose the Child Tax Credit (CTH) – These would be affected if the Republican bill passes
