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ksircar
New Member

I file tax return in India and have a bank account there. The interest ($330) is already declared in Indian return. Is the interest needs to be added in US return too?

The interest is earned in Indian Rupee.
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1 Reply
DS30
New Member

I file tax return in India and have a bank account there. The interest ($330) is already declared in Indian return. Is the interest needs to be added in US return too?

It depends -

If you are filing as a nonresident alien, then you would only need to report your US sourced income your US income tax return (Form 1040NR).  Here is a link to the IRS website for Form 1040NR, U.S. Nonresident Alien Income Tax Return.

However, if you are considered a US resident for the entire 2017 calendar tax year, you will need to report all worldwide income (including interest on a foreign bank account in USD on your US income tax return (Form 1040).

To report foreign interest (including your foreign tax credit) -

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 foreign interest income in TurboTax Online (for TurboTax Online sign-in, click Here , then select "Take Me to My Return") or Desktop, please follow these steps:

  1. Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
  2. Next click on “Wages & Income” ("Personal Income" in TurboTax Home & Business)
  3. Next click on “I’ll choose what I work on” (jump to full list)
  4. Scroll down the screen until to come to the section “Interest and Dividends”
  5. Choose “ Interest on 1099-INT” and select “start’
  6. Select "I'll type it in myself"
  7. Enter the name of the foreign bank, the amount of foreign interest income (in USD) in box 1
  8. Check the box "My form has info in more than just box 1 (this is uncommon)".
  9. Enter any foreign taxes paid in box 6

Also make sure the Part III of Schedule B is checked that you have a foreign bank account and if the aggregate of all your foreign financial assets for the 2017 calendar year is > $10,000 USD, you will need to file an FBAR.

To be directed to the US Treasury Government Website to prepare a Report of Foreign Bank and Financial Accounts, click FBAR (TurboTax does not support this form).

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