Thanks again for response,
1. She had only 2 types of income 1. interest income from savings and fixed deposits accounts 2. Capital gains from stock market (brokers accounts) - I understand even though interest income is passive - it still taxed as ordinary income but stocks capital gains is taxed as passive income.
2. But to offset risks she chose to have about 8 accounts with different banks and I believe 2 different brokerage accounts. When she fill in entries for interest and capital gains income - does she need to enter each of the different accounts or she can sum up all interest income and give a blanket name as payer like 'various Indian banks' and that is how she can report it.. I am asking because its too much to write each name separately. And I don't think IRS wants to know each of the Indian bank's name.
3. I have the same question when she fills out 1116 (foreign tax credit form) ..does she need to mention each account separately? it will be difficult or impossible to do so because banks/brokers did not deduct tax or gave any 1099 statements - so how do we know which amount tax we paid for each account separately? Can she just mention combined tax for all the income?
4. Her total gross income will be just above std deduction of $14050 and for that she owes only about $1500 tax (after all Indian deductions etc) ..just because her income is slightly above $14050 - she does need to file taxes and even though technically she will not owe any taxes to USA - she should still need to file form 1116 (foreign tax credit) correct? if yes what will happen to foreign tax credit ?
5. She is not in USA currently - so when I asked a tax preparer - she said she can not file for her because she is not here to sign - is that true ? does that mean she can login to turbotax in India and file return from there?
6. Even though she is US citizen but not residing in USA / neither she was resident as of 31st Dec 2020 - does she need to file as 1040-non resident ?
7. How do we specify that either interest income or capital gains income is not at all from the USA but its from India..in TurboTax - I did not see any option under wages/income to specify that.
