Hi giumar:
Form 8938 is purely a disclosure form; it does not and is not meant to calculate your US income tax on any foreign financial holdings. Any actual income you received through your foreign account (and any US tax on it) will be input separately when you report your income on Form 1040, Schedule B, Schedule D, etc. In TurboTax, this will mean entering your foreign income into the Interest & Dividends section interview, for example. That is where you US tax gets "calculated." For additional details please keep reading below for much more information on this topic.
Form 8938 (Statement of Specified Foreign Financial Assets) is required to be filed with your United States income tax return if you are a U.S citizen, Resident Alien, or a Non-Resident Aliens that has an interest in specified foreign financial assets, and meets the reporting IRS reporting requirements. In addition, there is another foreign account declaration required by the Treasury Department, unrelated to your tax return, and which is called FinCen Form 114. TurboTax can help you fill out Form 8938; FinCen Form 114 (if you need to file one) needs to be completed out of TurboTax, and over the internet. The following IRS webpage does a good job of explaining both requirements, the dollar amounts at which each is triggered, and so forth:
https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements
Now then, with respect to your original question, you will enter your foreign bank account income, in TurboTax, just as you would enter any domestic bank account income. That is, tell the program that you have Interest Income (whether or not you receive a Form 1099-INT the interest is still taxable), and the software will help you fill out Form 1040, Schedule B, where personal interest income is generally reported. You will also have the opportunity to tell the program about any foreign taxes you paid (in the 1099-B interview section), as you may be eligible for a foreign tax credit.
As to mechanically how to enter interest income in TurboTax online, whether or not you actually received a 1099-INT, do the following steps:
- Open (continue) your return in TurboTax.
- In the search box, search for 1099-INT (upper- or lower-case, with or without the dash) and then click the "Jump to" link in the search results.
- Answer Yes when asked if you received any interest income.
- If you land on the Interest Income Summary screen instead, click Add Interest Income.
- On the next screen, you'll be given options to either import or
manually type in your 1099-INT. Select the option you want and click Continue.
Once you do that, the foreign bank interest income will be added to your main Form 1040 taxable income calculation. Form 8938 itself does not determine your tax, or directly calculate your income tax in any way; it is simply and informational disclosure document.
That may be where the source of confusion arises.One final note is that you may additionally need to upgrade to a higher level version of TurboTax, in order to be able to complete Form 1040 Schedule B and Form 8938.
Thanks for asking this question, and good luck to you!
Regards
