Missed the US tax deadline? Here is what you need to know

If you missed the filing deadline, you should know that interest on unpaid taxes has been accruing since April 15 (currently at 7%). Penalties for late payment and filing kick in after June 15, and they add up fast. Missed informational returns can mean steep fines. Even if you’re still waiting for documents, don’t delay - start now.

Never filed US taxes? You’re not out of options

If you’re an American in the Netherlands who hasn’t been filing, you’re not alone. The IRS offers options, like the Streamlined Filing Procedures, for those who qualify.

Timing matters: if the IRS contacts you first, your options may shrink. Catching up could unlock valuable benefits, such as the Child Tax Credit.

Don’t forget FBAR: It’s more than just bank accounts!

You must file the Report of Foreign Bank and Financial Accounts (FBAR) if the total of all your foreign account balances combined exceeds $10.000 at any point during the year.

Common FBAR mistakes:

• Thinking that accounts with less than $10.000 are exempt 
• Assuming it only applies to bank accounts: FBAR covers foreign bank accounts, brokerage, insurance, or annuity plans with cash value, and retirement accounts (with some exceptions) 

Failing to file the FBAR can result in substantial penalties, starting at $10.000 per violation, which can quickly accumulate if multiple years are involved. 

Beyond filing: What expats often miss

We’ve found that many expats still encounter difficulties by failing to meet other reporting requirements or assuming certain rules don’t apply to them. Here are some of the most common (and costly) mistakes we see:

The Dutch 30% ruling for highly skilled expats

The 30% ruling can be a great perk for highly skilled workers in the Netherlands. It allows you to receive up to 30% of your salary tax-free, helping to offset the higher cost of living. As a result, your Dutch take-home pay may appear a little more favourable.

However, please note that this benefit only applies to Dutch taxes. The IRS still requires you to report the full amount on your US return.

From 2027, the 30% ruling will be reduced to a 27% ruling, meaning that a smaller portion of your salary will be tax-free in the Netherlands. 

“It’s just a side gig… I don’t make enough to file”

Many expats mistakenly believe their income is too low to require filing a US tax return, often confusing the statutory filing thresholds with the Foreign Earned Income Exclusion (FEIE) or misapplying the 30% ruling.

Americans must report all worldwide income, no matter where they live. While you can exclude up to $126.500 of foreign earned income under US tax rules, you still need to qualify and file to claim it. Income below the filing threshold doesn’t automatically exempt you from filing. 

Even just $400 of self-employment income, like gig work, triggers a filing requirement and may mean you owe self-employment tax. The good news: the US and the Netherlands have an International Social Security Agreement, so with proper planning, you can reduce your overall tax burden.

Married to a Dutch citizen (or planning to be!)?

When your spouse isn’t a US citizen, filing your taxes can get tricky. You can’t file as single, and filing jointly means you’d need to elect to treat your Dutch spouse as a US resident for tax purposes. Filing separately may seem simpler, but it could ultimately cost you more. A little planning goes a long way.

Foreign inheritances and gifts can come with strings attached

Gifts or inheritances over $100.000 from non-US persons, like a Dutch parent, must be reported on Form 3520. Gifts between spouses involving a Dutch (non-US) spouse also have limits and reporting requirements.

Large transfers, whether real estate or routine financial support, can unexpectedly trigger reporting obligations or tax consequences. These rules are complex and easy to overlook, but with proper guidance, they’re manageable.