Yes if you are filing a 1040 and are considered a US resident, you are required to report all your worldwide income on your tax return.
You will report this foreign bank interest on your tax return along with your foreign tax withholdings on this bank interest.
You can include this under the 1099-INT
section. Just make sure that you include
this amount in USD. Also, if you paid any foreign taxes on this interest
income, you will be able to take a Foreign Tax Credit for taxes paid on income that is also taxed in the
US.
The Internal Revenue Service has no official
exchange rate. In general, use the exchange rate prevailing (i.e., the spot
rate) when you received the income. Please refer to the following IRS links for
more information about Foreign
Currency and Currency Exchange Rates and Yearly
Average Currency Exchange Rates
To
enter this transaction in TurboTax Online or Desktop, please follow these
steps:
- Once
you are in your tax return, click on the “Federal Taxes” tab
("Personal" tab in TurboTax Home & Business)
- Next click on “Wages &
Income” ("Personal Income" in TurboTax Home & Business)
- Next click on “I’ll choose
what I work on” (jump to full list)
- Scroll down the screen until
to come to the section “Interest and Dividends”
- Choose “Stocks, Interest on
1099-INT” and select “start’
- Select "I'll type it in
myself"
- Enter the name of the foreign
bank, the amount (in USD) in box 1
- Check the box "My form
has info in more than just box 1 (this is uncommon)".
- Enter any foreign taxes paid
in box 6 (screenshot)
