I'm an American. I live and work in the US. I have bank accounts and mutual funds in Canada. I received T-5 forms for those accounts. How do I put them on my US taxes?

[ohkamp]

I did not sell any of my stocks this year. There were dividends apparently.

[DS30 · Accepted solution]

If you are a US citizen and you meet the income threshold to file a US income tax return, you will need to report all income from all sources (including foreign dividends and interest (in USD)) on your US income tax return.

The only time you do not have to report interest and dividends is if it is < $0.50 and rounds to zero.

Also if you have foreign financial accounts, you will need to answer "yes" to these questions in the TurboTax system.

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 interest income in TurboTax, log into your tax return (for TurboTax Online sign-in, click Here and click on "Take me to my return") type "1099int" in the search bar then select "jump to 1099int". TurboTax will guide you in entering this information.

1. Choose “ Interest on 1099-INT” and select “start’
2. Select "I'll type it in myself"
3. Enter the name of the foreign bank, the amount of foreign interest income (in USD) in box 1
4. Check the box "My form has info in more than just box 1 (this is uncommon)".
5. Enter any foreign taxes paid in box 6

To report foreign dividend income (including your foreign tax credit) -

To enter interest income in TurboTax, log into your tax return (for TurboTax Online sign-in, click Here and click on "Take me to my return") type "1099div" in the search bar then select "jump to 1099div". TurboTax will guide you in entering this information.

1. Choose “ Dividends on 1099-DIV” and select “start’
2. Select "I'll type it in myself"
3. Enter the name of the brokerage firm/foreign corporation and the amount (in USD) in box 1a (You will need to check if your foreign dividends are considered qualified dividends).
4. Check the box "My form has info in more than just box 1 (this is uncommon)".
5. Enter any Foreign taxes paid in Box 6.

The Internal Revenue Service has no official exchange rate. The IRS will normally accept any posted exchange rate that is used consistently. You can translate the foreign currency to U.S. dollars using the yearly average currency exchange rate for the tax year.  In general, use the exchange rate prevailing (i.e., the spot rate) when you receive, pay or accrue the item. Please refer to the following IRS links for more information about Foreign Currency and Currency Exchange Rates and Yearly Average Currency Exchange Rates.

PLEASE NOTE - That the future sale of foreign mutual funds held in an foreign account located outside the US may have additional reporting requirements and can become quite complicated. If the mutual funds were held for more than one year before the sale and you did not make a mark-to-market election on Form 8621 in a prior year, you may be subject to additional penalties and fees on these foreign mutual fund sales (under IRC section 1291 - the passive foreign investment company (PFIC) rules).

Please refer to Form 8621 instructions for more information.

[ohkamp]

This is very helpful. Thank you. However, which box from my T-5 is the total amount I am entering into the 1099-DIV? "Actual amount of eligible dividends," "Taxable amount of eligible dividends," "dividend tax credit for eligible dividends," or "capital gains dividends?"

And does "dividend tax credit for eligible dividends" go in box 6? Thanks again!

[DS30]

You will need to enter actual amount of eligible dividends in box 1a only , dividend tax credit in box 6 and the capital gains in box 2a

[ohkamp]

Thank you so much!!

[fresnarus2-]

It is generally preferable to have a "Qualified electing fund" election instead of a mark-to-market, but then the PFIC must provide an annual PFIC information statement, which is a foreign surrogate for a US 1099 form.

[marklew]

Thank you for this information.  TurboTax is requiring me to enter a valid Federal Payer ID number for interest and dividends received from investments in India. How do I get past this, since the bank(s) in India do not provide such a number?  Thanks!