Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
chiragpatel-emai
Level 1

Hi, I have a bank account in India. I got around $8000 as interest in these accounts. Where i can declare it in Turbotax??

I have a bank account (NRE account) in India. I got approximate 500,000 rupees at interest in this account during the year. It is around $7000. Where i can declare it in turbo tax?? I did not receive any document form my Indian bank because they do not operate in USA so they can't issue 1099 or any other form. They just gave me total interest income. So i need to convert into US dollar and show here. But where i can show in turbo tax??
1 Best answer

Accepted Solutions
pk
Level 13
Level 13

Hi, I have a bank account in India. I got around $8000 as interest in these accounts. Where i can declare it in Turbotax??

ChiragPatel,

there are at least two issues here ( assuming that you are a resident/citizen of USA) ---- (a) the interest reporting is done just like  you would if you had a 1099-INT --- just fill in the amount in US$ using either the annual average exchange rate published by the Treasury or any other valid/supportable  exchange rate;  (b) because the amount generating this interest may be beyond the $10,000 US$ -- you need to also file  the Treasury form 114 ( note that this  acounts reporting is now due by 4/15/2016 and not the earlier customary June 30th;  (c) you may also have to report to the IRS under FATCA -- specified foreign accounts reporting.  Suggest  boning up on these last two requirements -- the penalty for not reporting is quite high --- if you need more help , consider adding here or starting a new thread --pk

View solution in original post

8 Replies
pk
Level 13
Level 13

Hi, I have a bank account in India. I got around $8000 as interest in these accounts. Where i can declare it in Turbotax??

ChiragPatel,

there are at least two issues here ( assuming that you are a resident/citizen of USA) ---- (a) the interest reporting is done just like  you would if you had a 1099-INT --- just fill in the amount in US$ using either the annual average exchange rate published by the Treasury or any other valid/supportable  exchange rate;  (b) because the amount generating this interest may be beyond the $10,000 US$ -- you need to also file  the Treasury form 114 ( note that this  acounts reporting is now due by 4/15/2016 and not the earlier customary June 30th;  (c) you may also have to report to the IRS under FATCA -- specified foreign accounts reporting.  Suggest  boning up on these last two requirements -- the penalty for not reporting is quite high --- if you need more help , consider adding here or starting a new thread --pk

chiragpatel-emai
Level 1

Hi, I have a bank account in India. I got around $8000 as interest in these accounts. Where i can declare it in Turbotax??

Thank you for your reply. I understand point (a). Regarding point (b), it is applicable to me. Is this treasury form 114 needs to be filed along with income tax return? or is it complete separate filing? I also file FBAR every year separately sometime in May. Is this form 114 is different than FBAR?
Can you also clarify point (c). How to report it?
Every year i file my returns through CPA. This time i am planning to use Turbotax. I just have confusion about my foreign income declaration because interest income is around $800 and total value in those accounts is more than $10,000.
Thanks!!
pk
Level 13
Level 13

Hi, I have a bank account in India. I got around $8000 as interest in these accounts. Where i can declare it in Turbotax??

Chirag,
for the interest reporting , you treat is just like interest earned in an account in the USA -- i.e. you convert the income using exchange rate on the day the  amount was credited to you ( or since Indian banks often do not provide a printout showing details of transactions, you can use the  US Treasury published average  yearly rate of exchange.
Form 114 is the new version of the old FBAR form -- accounts that  has the highest value in  the tax year of $10,000 or more  to be reported .  This can  can be done online at the treasury site --- FINCEN  site  .
The FATCA form applies ( and is turned in with your return to the IRS ) to US citizzens and residents in the USA at around $90,000 or more  and higher if you are stationed abroad. The trigger point also changes with your filing status. From your post it does not appear you would ned to file this.
Please note the FBAR form is to be turned  in by April 18th. from this year.
sunilkrverma
New Member

Hi, I have a bank account in India. I got around $8000 as interest in these accounts. Where i can declare it in Turbotax??

FinCENReport 114, Report of Foreign Bank and Financial Accounts, is used to report a financial interest in or signature authority over a foreign financial account. The FBAR must be received by the Department of the Treasury on or before June 30th of the year immediately following the calendar year being reported. The June 30 filing date may not be extended
namits
New Member

Hi, I have a bank account in India. I got around $8000 as interest in these accounts. Where i can declare it in Turbotax??

@pk and @sunilkrverma I'm in a similar boat as Chirag. However how I paid taxes on my interest income in India so what can I do in order to avoid getting double taxed?
If I were to enter the income in 1099-INT it increases both my Federal and NY state taxes. How can I avoid that?
pk
Level 13
Level 13

Hi, I have a bank account in India. I got around $8000 as interest in these accounts. Where i can declare it in Turbotax??

namitsaksena, assuming that you are a US citizen/ resident/ resident-for-tax-purposes  ( i.e.  ataxpayer whom is being taxed on world income by the USA ), you report the  interest earned  ( in India ) just as if it was earned  here in the USA. This will raise your taxable income and also raise your US / State taxes. Then you file form 1116 to get credit for the taxes you paid to India, thus lowering the bite.   Something to consider the foreign tax credit is not always $ for $ , it is usually less  because while 100% is recognized , the allowable amount is based on a ratio foreign income to  world income ( modified). Sometimes it is better to take all of it as a deduction , if you itemize -- just like you deduct for  State taxes withheld.  Where as NewYork will give credit for taxes paid another state, it  may not ( I am not sure  -- please call the DOR ) give  credit for taxes paid to another country.  Hope this helps  Namit
namits
New Member

Hi, I have a bank account in India. I got around $8000 as interest in these accounts. Where i can declare it in Turbotax??

@pk thank you!  
I followed the steps above, however my interest received is ~$500 unlike Chirag's larger amount, so when I went to claim the credit using Form 1116, I got no credit :(   

Also in terms of FBAR and FinCENReport 114, is there a grace period to report for prior years or should I just report going forward and hope for the best?
pk
Level 13
Level 13

Hi, I have a bank account in India. I got around $8000 as interest in these accounts. Where i can declare it in Turbotax??

Namit, consider  using the  deduction path ( if you are itemizing -- usually works out if you home mortgage, property taxes etc. ).
FBAR reporting is mandatory for resident/citizen taxpayers ---- it used to be due by June of the following year but now is due at the same time as the tax return --April 15th.  You can file the last three year and this  year on line at <a rel="nofollow" target="_blank" href="http://www.fincen.gov">www.fincen.gov</a>    or go to US treasury and look for FinCen.  They don't ask reason for delay but the law allows them to penalize ( heavily) non-reporters.
God Luck --pk
Dynamic AdsDynamic Ads
Privacy Settings
v