1. Any interest income earned in a foreign country must be reported in USA.
2. Even if interest income in FCNR and NRE accounts in India are tax free, you must report them and pay taxes in USA.
3. Answer is yes. However, report each foreign bank separately. Write 11-111111 in first box as foreign banks do not give 1099 Int Form . Fill in other boxes like interest in USA banks. Write all amounts in USD. You can use OANDA or IRS website for exchange rate. You can take exchange rate as on 31st December 2020 or 1st January 2021. Be consistent in whatever exchange rate you use. If you paid foreign taxes, report in these forms so that you get tax credits in USA.
4. Turbo will direct you to fill in form 8938. if it is required for you. Form is very easy. Carefully read and complete form for each bank account. Form is in Turbo. It is submitted as a part of tax return.
5. If total foreign money (not interest) exceeds certain specified amount, then Turbo will ask you (after filling in form 8938) to fill in another form 114 on different website called FBAR; Turbo does not have form to fill in.
6. If you paid foreign taxes, you can get credit by filling in form 1116 on Turbo. Unfortunately, only a few turbo CPAs are knowledgeable about 1116. I pay highest premier live version Turbo and after wasting a lot of time with tax advisors, I get some foreign tax expert CPA who helps me.
Good luck for your taxes.
