THE FOREIGN SERVICE JOURNAL
Ex t en s i on fo r
Ta x paye r s Ab r oad :
Taxpayers whose tax home is
outside the United States on
April 18, 2017, are entitled to
an automatic extension until
June 15 to file their returns.
When filing the return, these
taxpayers should write
“Taxpayer Abroad” at the top
of the first page and attach
a statement of explana-
tion. There are no late-filing
or late-payment penalties
for returns filed and taxes
paid by June 15, but the IRS
does charge interest on any
amount owed from April 18
until the date it receives pay-
S t anda rd Dedu c t i on :
Taxpayers who do not itemize are entitled to take a standard
deduction in the following amounts:
2016 Standard Deduction
Married Filing Jointly
Head of Household
An additional amount is allowed for taxpayers over age 65 and
for those who are blind.
I t emi zed Dedu c t i on s :
Taxpayers who itemize cannot claim the standard deduc-
tion. However, itemizers gain the benefit of specific deduc-
tions, including the deduction for unreimbursed employee
expenses on 1040 Schedule A. These are deductible to the
extent they exceed 2 percent of adjusted gross income (AGI).
Some examples of unreimbursed employee expenses include
professional dues and subscriptions to publications; employ-
ment and continuing education expenses; home office, legal,
accounting, custodial and tax preparation fees; home leave,
representational and other employee business expenses.
In 2016, the IRS will phase out itemized deductions a
taxpayer is allowed at certain income thresholds. Unmar-
ried individuals earning more than $155,650 individually
($259,400 head of household, $311,300 married filing
jointly) should contact a tax professional to calculate the
limits on their itemized deductions.
Med i ca l and Den t a l Ex pen s es :
Taxpayers who itemize can deduct medical expenses to the
extent they exceed 10 percent of AGI (including health and
long-term care insurance, but not health insurance premiums
deducted from government salaries). If the taxpayer is over
65, the threshold at which this deduction can be claimed
remains at 7.5 percent until Jan. 1, 2017, after which, the
threshold increases to 10 percent for all taxpayers.
Un r e imbu r s ed Mov i ng Ex pen s es :
Taxpayers who itemize and those who claim the standard
deduction may claim unreimbursed moving expenses as
an adjustment to income. Unreimbursed moving expenses
include the cost of transportation, storage and travel costs
of moving the taxpayer, possessions (including pets) and the
taxpayer’s family. The cost of meals during the move does not
qualify. Other adjustments itemizers and non-itemizers may
claim include contributions to pre-tax IRAs, alimony pay-
ments, bad debt, student loan interest, tuition and fees and
educator expenses. Each may be subject to its own limits.
Dedu c t i b l e Ta xes :
There are only four kinds of deductible non-business taxes:
(1) State, local and foreign income taxes; (2) State and local
general sales taxes; (3) State, local and foreign real estate
taxes; and (4) State and local personal property taxes. The
taxpayer must itemize (using 1040 Schedule A) and must
have been charged and actually paid the taxes to be entitled
to these deductions.
* Marginal rates apply to income in excess of each of the prior tax brackets.
** Income thresholds for those married filing separately are half of those who are married filing jointly.
Same-sex couples who were married in or after tax year 2013, in a state where it is legal, must file their federal tax
return as either married filing jointly or married filing separately, not individually.
*** Refers to long-term capital gains—gains from the sale of property held for greater than 12 months.