Refunds: IRS announces delays for some taxpayers

U.S. Expats in Czech Republic might consider extending Czech tax deadline

U.S. Refund delayed? Try extending deadline to pay tax abroad
January 10, 2017 John Mohr

U.S. Refund delayed?

U.S. Expats might consider extending deadline to pay tax abroad

If you taxrefundare counting on a U.S. refund to settle a tax liability abroad, pay attention. The IRS is delaying the remittance of some refunds this year.

The IRS will begin to release EITC/ACTC refunds starting Feb. 15; these refunds likely will not reach taxpayers until the week of Feb. 27. The later deadline applies especially to taxpayers claiming the Earned Income Tax Credit and the Additional Child Tax Credit.

“The IRS cautions taxpayers that these refunds likely won’t arrive in bank accounts or debit cards until the week of February 27 – if there are no processing issues and the taxpayer chose direct deposit,” the info sheet added. “Urge taxpayers not to count on getting the refund by a certain date to make major purchases or pay bills. Even though the IRS issues most refunds in less than 21 days, it’s possible their tax return may require additional review and take longer.”

Taxpayers filing tax returns for the first time as a tax resident of another country might be due a U.S. refund if tax was withheld by a U.S.-base employer. Taxpayers who made greater than necessary estimated tax payments over the year and have higher incomes might also be due refunds. Both taxpayers might wish to use a U.S. refund to settle their foreign tax liability. Generally speaking, the only strategy available to these taxpayers is to file the U.S. return early. Some countries allow an extension of time to pay with the tax filing extension; this is the case in the Czech Republic. U.S. expats in Czech Republic expecting a U.S. refund might solve a cash flow problem and reduce or eliminate penalties by filing the U.S. return early and extending the deadline to file and pay tax Czech tax to June 30.

For more information about how this could impact you, please contact John Mohr at TaxAtoll.com