Question: Sarah is a U.S. citizen who moved to London for work in 2024. On May 15, 2025, as she was skimming through a financial blog, it suddenly hit her that she forgot to file her 2024 U.S. tax return. She realized that the regular filing deadline, April 15, had passed and still hadn’t filed her 2024 taxes. Panicking, Sarah wonders if she is in trouble for not filing her 2024 taxes on time. Is she required to file her 2024 taxes by April 15, 2025?

Answer: No, she is not in trouble for failing to file her 2024 tax return by April 15, 2025, because U.S. citizens who live abroad have a different filing deadline. According to IRC §6081 and Treasury Regulation §1.6081-5, U.S. citizens and resident aliens automatically qualify for a two-month extension to file their tax returns and pay federal income tax if, on the regular filing due date of their return, they meet one of the following conditions:

1. They live outside the United States and Puerto Rico, and their primary place of business or post of duty is outside the United States and Puerto Rico.
2. They serve in the military or naval service and are on duty outside the United States and Puerto Rico.

Since Sarah was living and working in London on April 15, 2025, she satisfies the first condition and qualifies for this automatic filing extension. This extension moves her filing deadline to June 16, 2025. The deadline is extended by one day because June 15 is a Sunday. She must include a statement explaining which of the two situations qualified her for the extension.

It is important to note that this extension applies only to filing, not paying. If she owes tax, interest will begin to accrue on any unpaid balance beginning April 15. Late payment penalties may still apply, unless she can show reasonable cause under IRC §6651.

If Sarah needs additional time beyond the automatic two-month extension, she can file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return, by June 16, 2025, and must check the box on Line 8 to request an additional four-month extension. This gives her until Oct. 15 to file her return. Interest and penalties are assessed from the original due date of her return (April 15).

Millennials are busy juggling side hustles, student loan bills, and crypto accounts, keeping their tax pros on their toes. Surprisingly, two beloved sitcoms, Friends and The Big Bang Theory, offer hilarious lessons about proactive vs. reactive tax strategies that every tax professional can appreciate.

Let’s unpack these classic scenes to see how they perfectly capture the tax challenges your millennial clients face.

Ross yelling “Pivot!” vs. Sheldon’s roommate contract: two tax strategies compared

Remember Ross shouting “Pivot!” as he tried to force a sofa up a stairwell? Or Sheldon handing Leonard his overly detailed roommate agreement? These classic sitcom scenes perfectly capture two approaches to tax planning.

Ross’s frantic “Pivot” (reactive strategy):

• Clients who realize too late that they owe bigger quarterly payments due to unexpected gig income
• Taxpayers who rely on last-minute, incomplete solutions – “I’ll just deduct it!” – without verifying deductions, documentation or eligibility
• Consequences? Penalties, interest and stress due to a lack of proactive planning

Sheldon’s roommate agreement (proactive strategy):

• Using clear, detailed plans (like Sheldon’s clauses) helps navigate complicated scenarios such as gig income, education benefits and crypto recordkeeping
• Documenting everything upfront – engagement letters, mileage logs or crypto ledgers – prevents confusion and IRS headaches later
• A proactive approach reduces stress and clarifies expectations, leaving your clients prepared for any tax Comic-Con emergency

The takeaway? Encourage millennial clients to plan like Sheldon so they rarely need to pivot like Ross. When life’s unexpected twists come, you’ll know exactly how far (and when) to pivot.

How tax pros can help millennials pivot proactively

Millennials navigate complex tax territory, from student loan deductions and employer education benefits to gig income and cryptocurrency. As a tax professional, here’s how you can help them plan proactively like Sheldon, rather than pivoting like Ross:

• Student loan interest: Remind clients they can deduct up to $2,500 in student loan interest each year. Guide them through managing their income to avoid deduction phaseouts, or explore refinancing and employer-based repayment programs under §127.
• Workplace education benefits: Help clients maximize tax-free employer education benefits (up to $5,250 annually under §127). Encourage them to verify their eligibility to avoid taxable surprises later.
• Gig economy: Gig work is self-employment (SE) income, which means quarterly estimated tax payments and SE tax considerations. Create clear plans early to prevent tax-time shock.
• Digital assets: Stress the importance of detailed recordkeeping for crypto transactions, reminding clients that digital assets count as property for tax purposes and affect their taxable income and basis.
• HSAs and retirement: Position HSAs as powerful triple-tax-advantaged tools, emphasizing their flexibility and tax-saving benefits for medical expenses now and in retirement.

By helping millennials approach their taxes proactively, you’ll set them up for smooth filing seasons and fewer stressful pivots.

For a deeper dive, check out the June TAXPRO article, Millennials: Workplace Education Benefits, the Gig Economy and Digital Assets. CPE is available for Professional and Premium level members.

In the early hours of May 22, the House passed the legislative text of the Republican-led House Ways and Means Committee’s tax proposal, a key component of the anticipated One Big Beautiful Bill, by a narrow 215-214 vote.

Earlier in the week, on May 18, the House Budget Committee approved this legislation, which extends numerous expiring provisions from the 2017 Tax Cuts and Jobs Act (TCJA) and temporarily enhances popular provisions such as the child tax credit and the SALT deduction.

Tax professionals should now prepare for potential changes as the legislation advances to the Senate for further deliberation.

Proposed changes to existing Tax Cuts and Jobs Act provisions under One Big Beautiful Bill

1. Child tax credit (CTC) 

Current law: $2,000 per child; expires after 2025

Proposed changes: Temporarily increase the credit to $2,500 per child for tax years 2025-2028, and revert to $2,000 thereafter; full SSN requirements added

2. Estate and gift tax exemption

Current law: increased $13,990,000 exemption (expiring after 2025)

Proposed changes: permanent increase of exemption to $15 million, indexed for inflation

3. §199A pass-through deduction 

Current law: 20% deduction based on qualified business income, wages and assets for pass-through entities and sole proprietors

Proposed changes: permanent deduction increased to 23% of the net amount of qualified items of income, gain, deduction and loss from a qualified trade or business

4. SALT deduction cap

Current law: capped at $10,000, expires after 2025

Proposed changes: permanent increase to $40,000 ($20,000 for MFS) subject to phaseout when a taxpayer’s MAGI exceeds $500,000 ($250,000 for MFS); additionally, both the $40,000 SALT cap and the $500,000 income phaseout would increase by 1% per year from 2026 through 2033

Note: The tax legislation, would eliminate the pass-through entity tax (PTET) deduction, which allows eligible pass-through entities to avoid the cap on the state and local tax (SALT) deduction. Instead, specified service trades or businesses (SSTBs) like accountants, dentists, doctors, nurses, veterinarians and lawyers would be subject to the new $40,000 ($20,000 MFS) federal, state and local tax deduction limit.

5. Bonus depreciation

Current law: phases out by Dec. 31, 2026

Proposed changes: extended and restored to 100% immediate deduction for qualified property placed in service after Jan. 19, 2025, and before Dec. 31, 2029; certain property extended through Dec. 31, 2030.

6. R&D expenditures

Current law: expenditures required to be amortized over a five-year period (domestic) for tax years after 2021

Proposed changes: immediate expensing restored for tax years after Dec. 31, 2024, with an election to amortize the expenses over five years; optional ten-year write-off under section §59(e)(2) preserved; effective for research or expenditures made after Dec. 31, 2024, and before Jan. 1, 2030.

New tax provisions included in One Big Beautiful Bill

1. No tax on qualified tip income  

The proposed changes include a deduction for qualified tips earned in occupations that customarily receive cash tips. These tips must be reported on specific forms, such as Form W-2, Wage and Tax Statement, or Form 1099-NEC, Nonemployee Compensation.

To qualify, the business must not be classified as a specified trade or business under §199A for the purposes of the qualified business income deduction. Highly compensated individuals, as defined under §414(q)(1), are not eligible for this deduction. This provision is temporary and would apply for tax years 2025 through 2028.

2. No tax on qualified overtime compensation 

The proposed changes introduce a deduction for qualified overtime compensation, defined as overtime payments required under Section 7 of the Fair Labor Standards Act (FLSA), calculated as the excess over an employee’s regular rate of pay. This overtime compensation must be reported on Form W-2. The deduction is available as an above-the-line deduction for taxpayers who claim the standard deduction.

However, highly compensated employees are ineligible for this benefit. This provision is temporary and applies for tax years 2025 through 2028.

3. Bonus additional deduction for seniors

The proposed changes provide seniors with a temporary, additional standard deduction of $4,000 instead of exempting Social Security benefits from taxation. This additional deduction phases out for taxpayers with incomes above $75,000 for single filers and $150,000 for married couples filing jointly. The provision is temporary and applies for tax years 2025 through 2028.

4. Car loan interest exclusion 

The proposed changes introduce a temporary deduction for interest paid on personal vehicle loans where final assembly occurs in the U.S. This deduction is capped at $10,000 annually and phases out for high-income earners, beginning at $100,000 for single filers and $200,000 for married couples filing jointly. This provision applies temporarily for tax years 2025 through 2028.

Current tax law credits to be repealed under One Big Beautiful Bill

1. Clean vehicle credit (§30D) for vehicles acquired after Dec. 31, 2026. Vehicles purchased in 2026 must meet the manufacturer limits (less than 200,000 vehicles sold).

2. Previously owned clean vehicle credit (§25E), applicable for vehicles acquired after Dec. 31, 2025.

3. Energy efficient home improvement credit (§25C), applicable for property placed in service after Dec. 31, 2025.

4. Residential clean energy credit (§25D), applicable for property placed in service after Dec. 31, 2025.