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Old 06.10.2019, 14:18
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US Taxes - zero owed, zero penalty for not filing

Hey EF friends, it's once again October and the automatic extension deadline for filing taxes is once again imminent. And once again I forgot to file my form 4868 requesting the extension, oops!

I did this last year, filed by Oct 15th and seemingly everything was fine. And then I got to thinking, I never owe any tax because I don't earn so much – what if I never file, like, ever? I still always file those ridiculous FBARs on time, and pay Swiss tax on time. Isn't that all I need to do?

A little background, knowing that the typical expat is here on a business contract or even here to shelter their millions$$$, so my story might actually apply only to 1/2 of 1%... I'm an artist, live on a farm with my Swiss wife, who's also an artist. We earn enough to get by and maintain the farm, and she's got a little put away from her dead aunt. We pay Swiss taxes, and abhor the US worldwide taxation policy, because they have no business in our life. None. I'm not interested in debating this; I just state it to say the US government is rarely on my radar and I try to stay off theirs. I don't earn nearly enough to rise above the Foreign Earned Income Exclusion, so for me it's a bunch of pointless formal paperwork and nothing else.

So this year, I decided to look more closely, since I forgot to file the extension, and I was wondering what the consequences might be. From what I can tell, there are none. In fact, I can't see any consequences to *never* filing, as long as I don't owe anything. The only thing that might happen is a higher chance of evasion suspicion, and maybe an audit. But my FBARs should ease their worried mind. Am I just filing to keep from being a suspected criminal? Doesn't sound very American, does it?

Anyway, can anyone point me to contrary evidence? If I were actually below the gross income filing threshold of $24,000 I'd be subject to the same scrutiny as not filing because I owe nothing.

The penalty for not filing is based on a percentage of tax owed, so 0% of $0 is 0$. Correct? So why should I bother filing? Why should I give Uncle Sam any more energy than necessary?

Thanks for reading!
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Old 06.10.2019, 14:22
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Re: US Taxes - zero owed, zero penalty for not filing

Filing limit is USD 12k, not 24k.

Of course, there is also the USD 97k exclusion, but you have to file to claim that and the housing exclusion, and/or tax credit.

Tom
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