Hi,
I have foreign bank accounts, (in India) and have earned interest on the same. I entered the amount multiple times while trying to fill the information in the online forms. But it does not show up on Schedule B of the form 1040.
Form 8938 is generated with the correct value and it asks where the interest income is reported but it does not show anywhere on the form 1040.
Please help with the above.
Also, since the deadline is approaching, if I e-file it now, would I be able to correct it later?
Thanks.
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@IshaMaun8 , found the issue --- and to me it is rather unfortunate .
During personal income entry session when you enter under " 1099-OID / Foreign Interest " , this just fills out the account details such as bank name acct # etc., earned in test where reported -- such as Schedule-B line 1, total value of the account etc., for purposes of form 8938. It does not do anything with it. You have enter the foreign earned Interest under " Interest on 1099-INT" even though you do not have 1099-INT. This then will show up on line 2(a) and 2(b) of form 1040.
As I said above I think this will mislead quite a few people whom have foreign interest income and have to fill out form 8938.
Hope this helps
Namaste
pk
@IshaMaun8 , please tell me more about the type of foreign assets -- are you talking about bank interests ( from fixed deposits perhaps ? ), Dividend, or sale of assets ( stocks/bonds etc. ) or what ? Did you pay taxes to India on these incomes ?
Are you a US person ( Citizen / GreenCard / Resident for Tax purposes ) or Non-Resident Alien ?
Can you tell me more about what you are seeing and/or how Turbo is misbehaving ?
And , yes you can file and come back and correct ( but if you owe monies to the IRS, this may mean interest charges at least ) -- so it is best to file as correct as you can get
I will circle back once I hear from you --yes?
Type of interests: Savings account interest.
Account and tax details: NRE savings account. Since these are non residential external accounts with the Indian banks, there are no taxes on that income to be paid in India.
Status: I am an alien but resident for tax purposes. Specifically I am on H1b visa.
Issue/Question: Turbotax suggest that I would need to file form 8938 and that was attached to the form 1040. There is a line in the form 8938 which asks where this interest is reported. E.g. "Schedule B" and "Form no"
But I cannot find this interest income reported anywhere on 1040. Is this supposed to go on 1040? If not, what should be entered in the form 8938 where it asks "where reported"?
Thanks.
@IshaMaun8 , from your name I am not certain which I should say " Namaste" or " Salam Alequom" -- please choose one -- I mean well.
As fa as 8938 goes it is just complying with the IRS requirement of reporting Foreign Specified Assets -- hence it is asking for the bank account details -- the threshold for reporting is as shown below : >>>> https://www.irs.gov/businesses/corporations/summary-of-fatca-reporting-for-us-taxpayers.
This does not however, have any thing to do with the actual reporting if income. So I thin you have still got to report the earned interest ( I understand because the deposit is held in dollar denomination and hence India does not tax these ( dollar current account ). Think the way to cover this is to tell TubroTax that you have interest income, not reported on 1099-INT, and enter the details of the amounts. This will transfer this details to 1040 line 2b.
Is there more I can do for you ?
pk
Namaste and thank you!
I did tell turbotax that I have interest income and it also accepted the amount, which is filled correctly on the form 8938 by turbotax but it still does not show up on the form 1040.
To be more precise, the foreign account row is added in the wages and income section but the earned amount shows to be 0 even though I did enter the correct interest amount.
@IshaMaun8 , are you saying that while the account and amount details do show up on form 8938 ( this should not have any tax consequence par se), but the earned interest of US$xxx does not show up on line 2b of form 1040 ( when you use the forms mode ) ? There should be an interest / 1099-INT worksheet where you can see the amounts you entered. The entry pho to that you have included is actually related only to form 8938 and not related to line 2a. 2b of form 1040. I don't understand the scenario -- can you give me some details, so I can recreate the scenario ---- I am assuming you are using downloaded/CD windows version of TurboTax ( I have Home & Business) -- 1. do you have wages ( give me a rough figure for simulation purposes only ); 2. US interest, foreign interest ( amounts roughly ), dividends ( US & foreign ), 3. sale of stocks etc ( foreign and US and short-term and long-term i.e. I am looking for all the passive incomes ). 4. anything else ?
I will try getting this recreated and see what Turbo thinks it is doing . Please answer --?
pk
@IshaMaun8 , found the issue --- and to me it is rather unfortunate .
During personal income entry session when you enter under " 1099-OID / Foreign Interest " , this just fills out the account details such as bank name acct # etc., earned in test where reported -- such as Schedule-B line 1, total value of the account etc., for purposes of form 8938. It does not do anything with it. You have enter the foreign earned Interest under " Interest on 1099-INT" even though you do not have 1099-INT. This then will show up on line 2(a) and 2(b) of form 1040.
As I said above I think this will mislead quite a few people whom have foreign interest income and have to fill out form 8938.
Hope this helps
Namaste
pk
Pk,
Thank you for figuring this.
I would try to add a 1099INT for my 1099OID even though I would not have an actual document.
To answer your previous question, I am using the online/website version and I agree it is unfortunate. Hope it would be corrected soon.
Appreciate your help.
Namaste 🙏🏼
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