Filing interest income from Indian NRI Accounts

[sviswan2]

Hi, I am filing my US return for the first time with interest income from a few NRI accounts that I hold in India, mainly income from fixed deposits. I do not have a 1099-INT with any of these banks, but would like to stick with the usual April deadline and have all the information around the interest paid and TDS (Tax deducted at source) for each of these accounts. However, I do not know where or how to enter these details in using turbotax. Additionally, apart from entering these into the tax forms, I have heard that this interest income has to be declared in other places too. Where else would I have to declare this interest and the financial accounts that I have? I have heard there is something called an FBAR that has to be filled. Thanks for your help in advance!

[LoganathanB]

You report foreign bank interest as if you received a 1099-Int in a separate line along with other interest from US banks.

To enter foreign taxes paid follow the steps 

You can enter the foreign taxes paid by you as follows

1. Enter all your foreign income.
2. Search for the foreign tax credit from within your return.
3. Select the Jump to link in the search results.
4. Answer Yes to Did you pay foreign taxes in 2021 or have credits to use from a prior year?
5. Follow the instructions and enter the information to get the credit or deduction.

We will attach Form 1116, Foreign Tax Credit if your situation requires it.

For more information on foreign tax credit click on the link

Foreign Tax Credit

You must file an FBAR to report if

1. a financial interest in or signature or other authority over at least one financial account located outside the United States if
2. the aggregate value of those foreign financial accounts exceeded $10,000 at any time during the calendar year reported.

Click on the links below for more information.

Reporting of foreign bank accounts

 

[sviswan2]

Thanks loganathan. In terms of actual entry of the taxes without a 1099-INT, do i just enter the institution name (e.g. ICICI Pvt Ltd) as the bank name? how will it be identified in the schedule B as a foreign institution if I just enter it as a separate line item there?

[LoganathanB]

Yes. You can enter the actual Bank name. The requirement is you report worldwide income.

[sviswan2]

Thanks Loganathan. Are there any other forms I have to fill out if I do hold the NRI accounts? I saw that there is a form 8938 that also has to be filed if you do hold foreign bank accounts?

[LoganathanB]

No other form needs to be filled out.   

You have to file 8938 along with your tax return if the value of foreign financial assets exceeds a certain threshold.  

The threshold for filing form 8938 along with the tax return is        

1. If you are single or married filing separately, the threshold for filing 8938 is if the total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year.        

2. If you are married and you and your spouse file a joint income tax return, if the total value of your specified foreign financial assets is more than $100,000 on the last day of the tax year or more than $150,000 at any time during the tax year.  

Click on the link for more info   Form 8938 

You may have to file FBAR with Financial Crime Network Enforcement if you have a financial interest in or signature authority over foreign financial accounts must file an FBAR if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year. 

Click on the link for more information FBAR

[Anubhav 13]

Hello. I am an American citizen that currently living in India. I opened a NRE account in middle of 2023, and I moved to India Nov 2023. I just filed my taxes for 2023, but I realized I had interest income of roughly 16 dollars (1400 rupees) from my NRE and I forgot to report. I did not have to do FBAR because I did not go over $10,000. From what I am reading in this article is that I have to file for that $16 interest. Is that correct? Also, would I have to ammend my return? Just to ensure I understand, I convert to dollars they day the amount came in. So for example, if on 11/1/2023, I was paid 1000 rupees in interest, could I go to yahoo finance for that day and convert to dollars? Then for each day, the totals in dollars?

[DMarkM1]

Yes, the interest income is reportable income.   You should file an amendment to include the interest income.  Yes, you should convert to US dollars on the date(s) the income is received.  Here is a link that may help with amending a US tax return.