I have a foreign bank account that earns less than $1 interest and has a balance of less than $10000. Do I need to report any form to IRS? When I went through turbo tax process, it did not produce any form at the end or has any information on my tax return that I have foreign bank account when I previewed my tax return prior to file it.
Yes, there is reporting requirement for foreign accounts even if the balance at any time during the year was less than $10,000. It is reported by a checked box on Schedule B.
You need to say "yes" or check the box when the program asks if you had "Owned or signed on a foreign bank, broker, or other financial account." If at any time during tax year you did not have equivalent of $10,000 or more on your bank account(s), then there will be no additional filing requirements. But if you do have additional foreign bank/asset required reporting to do, TurboTax will walk you through and suggest the next step.
If TurboTax doesn't prompt you for foreign account information, go to: Federal Taxes (Personal in Home & Business version) - Wages & Income - under the section Interest and Dividends start the interview for 1099-OID, Foreign Accounts.
You can also read more about it here: https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Report-of-Foreign-Bank-and-Financial...
I understand this situation, I followed the instruction as suggested by turbo tax according to this - You need to say "yes" or check the box when the program asks if you had "Owned or signed on a foreign bank, broker, or other financial account." My question is: My foreign account balance was less than $10000 at all times during last calendar year, But I received interest < $50 and > $10 on that income, so do i still need to report this interest received using 1099-INT option?
Yes. If you are filing Form 1040/1040A/1040EZ, you must report worldwide income. Even if it's less than $10.
Thank you very much for clarifying that.
Although after researching further this answer contradicts with this answer (<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/3224627-i-had-a-foreign-bank-account-with-a-balance-of-less-than-10-000-00-u-s-do-i-have-to-report-that-account-if-so-where):">https://ttlc.intuit.com/questions/3224627-i-had-a-foreign-bank-account-with-a-balance-of-less-than-10-000-00-u-s-do-i-have-to-report-that-account-if-so-where):</a>
---
You do not have to report your foreign bank account on your tax return unless the foreign account goes over $10,000 for just one day, you have to file an FBAR.
Also you will need to report any foreign bank interest you receive because US citizens and residents are required to report all worldwide income in USD on your tax return.
If you have foreign bank accounts, you may be required to file a Report of Foreign Bank and Financial Accounts (FBAR) if are a US citizen or resident and:
you had a financial interest in or signature authority over at least one financial account located outside of the United States; and
the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year reported.
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)
---
So should i check "YES" in case of "Owned or signed on a foreign bank, broker, or other financial account." or Say "NO", as I am reporting interest with the 1099-INT as well?
Again thanks for clarifying it.
There are several levels of reporting. If you had a foreign account, no matter the balance on the account during the year, you must check the box on Schedule B that says that you had a foreign account. This is one level (Schedule B). Then, if you had a balance of $10,000 or more on your account(s), you also have to file FBAR (separate from your return and due by 06/30/16). You can e-file it here <a rel="nofollow" target="_blank" href="http://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html">http://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html</a>
So yes, you have to say "yes" that you owned an account. The program will ask you what the highest balance was. And if it was over $10K, it will tell you to file FBAR (link above).
That cleared it all for me, I appreciate the quick response!
Is the 10,000 MAX only in regards to "USD" ? What is your countries currency is more than 10,000 locally as far as the amount in the bank account, bet less than 10,000 USD?
Thank you
Please see the following link for the conversion rate you need to use for the FBAR
Reporting Maximum Account Value
@Taxonpmy @kb2531 @KarenJ2 @jayg451 @KristinaK
I am a U.S citizen. I have a bank account in New Zealand, even though I don't live in New Zealand. I worked in New Zealand ten years ago, and ended up moving around $9,000 USD into the New Zealand account.
My income for the past several years has been less than $10,000 USD, and for other reasons I do not have a requirement to file. But I am just learning about this law about if you have $10,000 in a foreign bank account you may need to file. How would I even know whether my New Zealand dollar balance went above the $10,000 USD threshold? It may have gone above it at some point? It would be impossible to look at the exchange rate for every day from the last ten years.
The IRS knows about my New Zealand bank account because a few years ago I had to submit a document to the New Zealand bank, because I am a U.S citizen, and that document was sent to the IRS.
Also, how would I go back and report the bank account if it did so happen temporary go over $10,000? Which exchange rate do we use? Because of the high interest over the years in New Zealand, it's possible that at some point it reached over $10,000 USD.. but due to the exchange rate fluctuating.. now the New Zealand dollar is very weak. It's confusing..
and again, normally I don't even have a requirement to file.. because my income is too low, etc.! Now I'm sitting here worried that I may have missed this requirement that I've never even heard of until today.