Tax Day, April 15: Austin or Amsterdam, the IRS doesn't care

The income tax return. For individuals, for tax year 2025. If you live abroad, you usually get an automatic two-month extension, but only for filing, not for paying. Interest starts running tomorrow.

The return for regular corporations. Partnerships were already due in March, and people mix that up all the time.

The foreign bank account report. It doesn't go to the tax authority but to a separate office of the Treasury, and it has an automatic extension to October. Miss it and you risk penalties based on your account balance, not on any tax.

And the form reporting transactions between a US company and its foreign owner. This is the filing European founders overlook most often, and the most expensive one.

It deserves its own section, because in our practice it's the most common serious omission.

If a US company is at least 25 percent foreign-owned, it must report every year which transactions took place between the company and that owner. Contributions, distributions, loans, services, rent, everything.

This obligation applies even if the company had no income. It applies to the single-member LLC that is treated as tax-transparent and otherwise wouldn't have to file a return of its own. It applies even if the company is dormant.

The penalty for a missed filing starts at an amount that makes European founders go pale, and it can be imposed again if you don't file after being asked to.

If you own a US company and you're reading this paragraph for the first time, call someone today.

The American system separates the two. There are filing obligations that exist regardless of any tax owed, and their penalties are just as independent of any tax owed. You can owe zero tax and face a five-figure penalty because one form is missing.

It isn't malice, it's the logic of the system: these filings are information tools, not payment demands. Their value to the government lies in the information, so failing to file is penalized as withholding information.

Request the extension. It's granted on request to individuals and companies alike, no reason needed, for six months. It's a formality and it costs nothing.

But pay anyway. The extension postpones filing, not payment. If you think you owe tax, send an estimated payment. Interest and late-payment penalties start tomorrow, extension or not.

And file the information returns, even if incomplete. A filing submitted on time and corrected later is in a much better position than one that never arrives.

June 15: Deadline for taxpayers living abroad after the automatic extension, and second estimated tax payment.

September 15: Third estimated tax payment and deadline for extended partnership returns.

October 15: Deadline for extended individual returns and for the foreign bank account report.

And throughout the year: sales tax in every state where you have nexus, quarterly payroll taxes, and the annual report for your state of formation.

It's the first filing season under the tax package from summer 2025. New deductions for tips and overtime, a much higher deduction for state and local taxes, and changed reporting thresholds for payment platforms.

Yesterday also saw the draft rules for the new excise tax on certain international transfers. As described in January, it only covers cash and cash-like payment methods, not account-to-account transfers.

And also yesterday came the final rule defining the occupations in which tips are customary. For hospitality businesses, that's the most important practical change this season.

This system has three kinds of consequences, and they differ a lot.

Late filing. A percentage penalty on the tax owed, monthly, up to a cap. If you owe nothing, you usually pay little or nothing here.

Late payment. A lower percentage penalty plus interest. That's why it's almost always right to file and pay later, rather than postpone both.

Missing information returns. Fixed amounts per form, regardless of tax. This is the category that ruins European owners, and it has nothing to do with making money.

If you've missed a deadline, file right away anyway. Penalties are tiered and rise with the delay. Two weeks late is a different world from six months late.

Three years ago, someone set up an LLC because an online video explained how easy it is. He never used it, never opened an account, never made a sale.

He never filed a return, because there was nothing to report. And he never filed the form on transactions with the foreign owner, because he had never heard of it.

Now he wants to dissolve the company, or suddenly needs it after all, and finds out: the state wants three years of fees, the IRS wants three years of zero returns, and every missing filing carries a potential penalty larger than the entire business idea.

It can be fixed, as a rule, with reasonable effort. But it was entirely avoidable, with a deadline calendar and two hours a year.

For all the paperwork, the American tax system is far friendlier to entrepreneurs than its forms suggest.

Business expenses are recognized more generously than in most of Europe. Losses can be offset more broadly. There's immediate expensing on a scale that amazes accountants back home. And you can largely choose how a company is taxed, something Europe doesn't offer in this form.

The price of this freedom is formalities and deadlines. It's a trade most entrepreneurs would take instantly, if someone put it to them that way.

So what goes wrong almost never goes wrong in the math. It goes wrong in the filing, the remembering, the follow-up. That's exactly what advisors are for, and it's why the question isn't whether you can afford one, but whether you can afford not to.

When someone comes to us with an unclear US tax situation, we always take the same path, and it helps to know it.

First: who is taxable, and since when? Citizenship, residence status, days present. This question decides everything else and is surprisingly often answered wrong, because people don't know their own travel days.

Second: which returns are missing, and which information filings? Each separately, because the penalties work differently.

Third: would any tax have been due at all? In a great many cases the answer is no, and that changes the strategy completely, because then only the information filings matter.

Fourth: which procedure fits? For non-willful omissions there's the streamlined filing procedure, and it's remarkably lenient, as long as the IRS hasn't contacted you first.

Fifth: what does the future look like? Because a cleanup without a structure behind it will repeat itself in five years.

For a normal case, this takes a few weeks. It's unpleasant, because you have to dig out old records. And in the end it's almost always less bad than people feared.

Do I have to file in both countries? If you live in Europe and are a US taxpayer: yes, in both. A tax treaty prevents double taxation, not double filing.

So do I pay twice? As a rule, no. US taxpayers abroad can credit foreign taxes or exclude earned income up to a limit. For normal incomes, what you end up owing in the United States is often zero.

What if I just have an LLC but live in Europe? Then almost everything depends on where the company actually does business and whether it has a permanent establishment in the United States. This is the single most important question in the whole topic, and online it gets answered with a confidence that nothing justifies.

Can I do it myself? If your situation is purely American: yes. As soon as a European connection comes in, standard software will reliably lead you astray, because it isn't built for these setups.

The difference between a relaxed April 15 and a dreadful one isn't made in April. It's made in October of the year before.

If you project in the fall where you're going to land, you can still act: bring investments forward, push distributions back, adjust estimated payments. If you only run the numbers in spring, you get a result you can do nothing about except pay.

That's the real value of ongoing support, and it's why American business owners talk to their tax advisor four times a year, not once.

If you want to get your deadlines and filings in order, talk to Mount Bonnell Advisors in Austin, Texas. You'll find an overview in Tax Support for US Companies and US Taxes.

Update: What happens next is covered in: On Thursday, October 15, the last extension for your 2025 US tax return runs out.

Consultation & implementation

If you'd like to find out what this means for your own situation, the best step is to book a consultation.