where to report foreign bank account interest? Should I include it in taxable interest (schedule A) or foreign income? They seem to be treated differently.
- posted
17 years ago
where to report foreign bank account interest? Should I include it in taxable interest (schedule A) or foreign income? They seem to be treated differently.
Interest on foreign bank accounts, etc. is treated no differently than interest on US accounts. List the payors on Schedule B, just like you do with your American banks. Foreign earned income (wages, etc.) may be treated differently but other foreign sources are not. Lanny K. Williams, CPA Nawarat, Williams & Co., Ltd. Income Tax Services for Expatriate Americans
If you have interest income from any worldwide source, it gets reported as interest income. If any foreign taxes were withheld, you may also either deduct them as an itemized deduction or claim it as a foreign tax credit on form 1116. To determine which benefits you more, you should inquire of your own CPA/tax advisor. I don't know what you mean by reporting something as "foreign income". Income is generally reported on the appropriate form or schedule for the type or class of income it is. The US or non US source of it generally doesn't change the character of interest income as an example. ___________________________________
-----> real address on hobokeni or hobokenx
You would report the foreign earned income on Form 1040, line 8a and if your total insterest is olver $1500, you must also report it on Schedule B. Also, you need to answer the question at the bottom of Schedule B. Also, you may be required to file Form TD F 90-22.1.
Rudy
Disclaimer: The posted answer is for educational purposes only and Lizcano Tax Services, LLC and/or Rodolfo Lizcano have not been engaged to render any tax, accounting, legal, or other professional services.
It would be interest on Schedule B. Please don't forget the reporting requirement for form TD F 90-22.1 should it be required. You may also be eligible for form 1116 or 2555 depending on circumstance.
Form 2555 would not apply to the interest income although Form1116 could be appropriate if there was tax withheld from the interest payment. Form 2555 applies only to earned income, i.e. income from salaries, wages, and other forms of income from a person's labor. Lanny K. Williams, CPA Nawarat, Williams & Co., Ltd. Income Tax Services for Expatriate Americans
And of course you need to convert from foreign currency to U.S. currency as of the paid date. There are calculators on the Internet which allow you to enter a date, from/to currency, and source amount, giving the converted amount.
-Mark Bole
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.