How do I report interest on a foreign savings account?

[markbowen]

In TurboTax. I realize it should go on Schedule B, but the Turbo Tax algorithm won't let me proceed past the screens with US form numbers (1099)...

[DaveF1006]

The reason it is not letting you move forward is that it requires a nine-digit FEIN, which most foreign banks don't have. As a result, your interest income needs to be reported differently.

1. Go to Wages & Income > Less Common Income (at the very bottom).
2. Select Miscellaneous Income, 1099-A, 1099-C > Start.
3. Choose Other reportable income at the bottom of the list.
4. Description: Enter "Foreign Interest: [Bank Name]".
5. Amount: Enter the USD total.

This will place the income on Schedule 1 and then carry it to your 1040, which is perfectly acceptable for foreign interest without a 1099, even if it can't be reported on Schedule B.

[PenelopeLively]

@DaveF1006 - Does this same rule apply when you have Dividends and capital gains/ losses for a Trading account outside US or does the individual have to log it as a 1099 along with the regular investment section.  I had logged it there for both INT, DIV and Capital gains and system took it even without entering the firm EIN number. I just want to ensure I am doing it correctly

[DaveF1006]

This works for reporting interest but dummy 1099's should be used for 1099 DIV and for capital gains from stock. The reason being, there may be qualified dividends in the 1099 DIV that qualify for the long-term capital gain tax rate. In addition, stock or mutual fund sales may have long-term capital gains to report; thus this must be reported in the correct section of your return to treat the long-term capital gains correctly.

To report the 1099 DIV.

1. Click on Federal in the left-hand menu.
2. Select the Wages & Income tab.
3. Scroll down to the Investments and Savings section.
4. Click Start (or Revisit) next to Dividends on 1099-DIV.
5. Choose Manual Entry:
6. If the software asks "Did you receive any dividend income?", click Yes.
7. On the screen "Let's import your tax info," do not search for a bank. Instead, scroll down and click Enter a different way.
8. On the next screen, select the 1099-DIV box 

To report the stock sales.

1. Click on Federal in the left-hand menu.
2. Select the Wages & Income tab.
3. Scroll down to the Investments and Savings section
4. Select Stocks, Cryptocurrency, Mutual Funds, Bonds, Other.

Now, the main obstacle to consider is the nine digit FEIN. Some users are successful, by typing 99-9999999, 00-0000000 or 99-0999999.  If your program won't accept these, you will need to print and mail your return.  As I said, this is okay for reporting interest that is regular income. It is not okay to report any income that is eligible for the long-term capital gain rate.

Please write back if you have additional questions.