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How to report interest income on foreign bank accounts

Forum|Forum|7 years ago
June 7, 2019
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I have interest income of around 150$ from foreign bank account which I have to report in my tax return, where do I report it? Currently I have added it along with other Interest income from US bank accounts as a seperate row. I dont have 1099 INT form for this income since banks in India don't issue this. I have converted the INR to USD per rate conversion available on IRS website for FBAR.

I will file FBAR by the due date to report this account.

TurboTax Deluxe Online

Best answer by MargaretL

Please enter your foreign interest income AS IF you have received 1099-INT for it and enter interest income in box 1. If you paid any foreign taxes on the interest income, enter them in box 6 of 1099-INT form (be sure to indicate that you have more than just box on the form - see pic). And you are correct to do so in U.S. dollars.

Federal Taxes
Wages and Income
Interest and Dividends, select Interest on 1099-INT

Note: You may have to file form Fincen 114, if your foreign account(s) exceed $10000 at any time during 2016. You have to file it through the Treasury website: http://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html

MargaretLAnswer

Level 12

Please enter your foreign interest income AS IF you have received 1099-INT for it and enter interest income in box 1. If you paid any foreign taxes on the interest income, enter them in box 6 of 1099-INT form (be sure to indicate that you have more than just box on the form - see pic). And you are correct to do so in U.S. dollars.

Federal Taxes
Wages and Income
Interest and Dividends, select Interest on 1099-INT

Note: You may have to file form Fincen 114, if your foreign account(s) exceed $10000 at any time during 2016. You have to file it through the Treasury website: http://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html

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jeffjlaw

Level 2

This explanation is very helpful. Can something be done to amend the TT software to remove the confusing and misleading language? When entering interest income the website says that if you have interest from something else - which would clearly seem to include foreign interest which is not on a 1099INT - it will be added later. Despite this statement, the software does not provide the option to add foreign interest later. It just loops back to the summary income page. (I suspect that what the wording meant to say is "later" in a different section, not in the current 1099INT section). Even the "learn more" link for 1099INT does not mention that foreign interest income should be input in this section. The 1099INT section has a graphic image of the top of a 1099INT form as well as questions about various boxes on the 1099INT form, all of which creates the impression that without a 1099INT you are in the wrong place. The other alternative was to assume that foreign interest income might be input into the field for "foreign accounts" but again the TT software does not allow you to do this (this section is limited to form 8938 data input). The easy solution would be to amend the wording on the 1099INT page to state that even without a 1099INT, foreign interest income should be added in this section. It seems quite simple to correct this (time consuming!) impression with a few extra words or some additional info in the "learn more" link. Judging by the sheer number of questions on the Intuit website regarding foreign interest income this amendment would be time well spent. Again, thanks to TTML for the helpful clarification and explanation.

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Andythewall

Level 2

Was there an answer to what should we add in the 'Payer ID of Federal tax ID number'? A foreign bank does not have a federal ID number from US and TT won’t allow to file without it being added to the 1099 INT form

ihave tried all 9s and all 0s. Please can someone clarify!

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KarenJ2

Level 13

Please try all 1s as the Payer ID and see if that will work.

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Andythewall

Level 2

Is there no way to disable it? What if all 1s is an actual entity. Wiki says the first two digits indicate that geographical area in the us the entity exists. If we put all 1s, then 11- would mean that the bank is in Austin. It’s not in Austin, it’s overseas. This doesn’t seem right to do. Is this what Turbo Tax Intuit Tax CPA would recommend to do?

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Andythewall

Level 2

Here is what I was able to find out from one of TTs CPA.

https://ttlc.intuit.com/community/taxes/discussion/received-interest-from-foreign-bank-what-do-i-put-in-federal-id-number-on-1099-int-screen/00/1059309

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PRIYA200892

Level 2

Hi,

I am facing a similar case. Can you please share your experience ?
should I add India interest income (converted to usd) and US interest income and enter as one single value ?

Separately, for FBAR how do you declare the Mutual Funds value during the year ?

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linaj20201

Level 14

I will suggest you to separate them into two transactions, just to be clear. However, the total amount should show on line 2b on your Form 1040 as an taxable event.

Regarding FBAR, to enter your mutual fund account value, here are the steps:

In TurboTax online,

Sign in to your TurboTax account and select Pick up where you left off
At the right upper corner, in the search box, type in "foreign assets" and Enter
Select Jump to foreign assets
Follow prompts
On-screen, "Amounts Related to Foreign Financial Assets", enter information

If you live in the US and meet one of the following criteria, you would need to file a Form 8938.

Unmarried individual (or married filing separately): Total value of assets was more than $50,000 on the last day of the tax year, or more than $75,000 at any time during the year.

Married individual filing jointly: Total value of assets was more than $100,000 on the last day of the tax year, or more than $150,000 at any time during the year.

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PRIYA200892

Level 2

Can you please show a screenshot or some detail around what you mean by - line 2b of form 1040? Not sure what this means.

Also, under what criteria do we need to file FBAR ?

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kurmakote

Level 2

How to report interest income on several nro and nre accounts in more than one bank. Do they have to be listed separately for each account or can be grouped for each bank? in TT

DaveF1006

Level 15

With TurboTax, you don’t have to list every NRO or NRE account on its own. You can group all interest from the same bank together, or even report all your foreign interest on one line, as long as the total is correct. TurboTax does not require account‑by‑account reporting. To report.