TheRealCanadian
Volunteer Moderator
pv1976 said:
Worldwide income is worldwide income. Unless there is a specific clause in the tax treaty to enable this, IRS may not agree with you.
should one report NRE accounts to IRS
- Thread starter RS_IL
- Start date
Worldwide income is worldwide income. Unless there is a specific clause in the tax treaty to enable this, IRS may not agree with you.
TheRealCanadian
Volunteer Moderator
js123431 said:
You should be able to declare the income even without a 1099 on Schedule A, I believe. IRS is always happy when you declare income they didn't know about.
WaitingOver
Registered Users (C)
Here are my findings.
SBI -
You can open NRE account with SBI only in India. This account do not require SSN. So you will not receive 1099-INT from SBI. Also you can not withdraw money from this account in US dollars.Therefore no need declare this account to IRS.
ICICI -
You can open NRE account with ICICI from US in India. This account also do not require SSN. So you will not receive 1099-INT. Also you can not withdraw money from this account in US dollars. Therefore no need declare this account to IRS.
CITI-NRI
You can open NRE account with CITI either in US branch or in India. They will keep your money in NRE account in India only. This account require SSN. So you will receive 1099-INT every year. Also with CITI ATM card you not withdraw money from this account in US dollars. Therefore you must declare this account to IRS.
Also you need to declare foreign account only when you have $10K in your account at any time in the whole year.
SBI -
You can open NRE account with SBI only in India. This account do not require SSN. So you will not receive 1099-INT from SBI. Also you can not withdraw money from this account in US dollars.Therefore no need declare this account to IRS.
ICICI -
You can open NRE account with ICICI from US in India. This account also do not require SSN. So you will not receive 1099-INT. Also you can not withdraw money from this account in US dollars. Therefore no need declare this account to IRS.
CITI-NRI
You can open NRE account with CITI either in US branch or in India. They will keep your money in NRE account in India only. This account require SSN. So you will receive 1099-INT every year. Also with CITI ATM card you not withdraw money from this account in US dollars. Therefore you must declare this account to IRS.
Also you need to declare foreign account only when you have $10K in your account at any time in the whole year.
You definitely do not need any 1099 or any form as prerquisite to declaring the income in your US tax returns. You just need to add the earned "foreign income" in your US tax return. Similarly one can claim the foreign tax as deductible. It is wrong to say that if one declares the income in an overseas country or one pays taxes there or even if it is "tax free" one need not declare it in the US tax return. If you are GC or citizen all worldwide income HAS to be declared in your US tax return to IRS. If interest in the account is over $10k then treasury needs to be notified by June end.
If you have not declared Indian income of previous years one can easily file amended tax returns with IRS for previous years.
Tax treaties avoid double taxation. They do not absolve any one not to report overseas income in the US. Tax treaties also help in not paying FICA for first 5 years on F1 status "residents" for countries such as India.
If you have not declared Indian income of previous years one can easily file amended tax returns with IRS for previous years.
Tax treaties avoid double taxation. They do not absolve any one not to report overseas income in the US. Tax treaties also help in not paying FICA for first 5 years on F1 status "residents" for countries such as India.
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TheRealCanadian
Volunteer Moderator
WaitingOver said:
Wrong. Just because you don't get a 1099, require an SSN or withdraw in US dollars does not mean you do not declare the account
Wrong again. Here are two questions you need to answer. This is really simple.
1. Do I get any interest? If yes, then I declare the amount. If taxes are withheld at source, I file a 1116 for a foreign tax credit.
2. Did it have more than $10,000 at any time during the year? If yes, then file the TD92.20.
I have Canadian dollar accounts that do not require an SSN (why should they? they are in Canada) and do not issue me 1099s. You better believe I declare the capital gains/interest, and file the TD92.20.
WaitingOver said:
I opened an ICICI NRE Savings account in India. Yes, you can fully withdraw money in U.S. $but why would you do that because you'll be penalized twice for currency conversion, once during the deposit($ to Rs.) and again at the time of withdraw(Rs. to $).
WaitingOver said:
Well, SBI or ICICI may not ask for SSN, that does not imply that you don't need to pay tax to IRS. Evetually, the libability of declaring income is on you, not bank. In fact I just saw ICICI website regarding NRE account. It's only says that customer does not need to pay tax in India. However, it does not provide guideline about the taxation of foreign country....for obvious reason - every country has its own law to address this issue (based on treaty or absence of it). So ultimately, it's upto the customer to figure out whether he should pay tax or not (based on the country where he/she is living).
I agree that we can draw in US $ from NRE ICICI account(I checked with the bank). Regarding you other comment about withdrawal, it depends upon when you do that.
Eg: If you had deposited $1000 year before, probably you would have got around Rs.47000 in your account(approx Rs.47/$ after charges). Now the dollar value is weak compared to one year before (Rs.43/$), you will be gained when you bring it back here.
Is it not!!??
Eg: If you had deposited $1000 year before, probably you would have got around Rs.47000 in your account(approx Rs.47/$ after charges). Now the dollar value is weak compared to one year before (Rs.43/$), you will be gained when you bring it back here.
Is it not!!??
jaganjai said:
Well, in the last year budget, the finance minister of India proposed a tax on the NRE accounts, which was taken back in this year budget before even it got implemented. That is what being mentioned in the ICICI web site. It is just that ICICI has mentioned, but it is true that we don't want to pay taxes for NRE accounts in any bank at India.
My question now if the taxation on NRE was not taken back, do we have to pay taxes in both the countries? What is the tax treaty between India and US then as mentioned in this thread.
Still confused...
My question now if the taxation on NRE was not taken back, do we have to pay taxes in both the countries? What is the tax treaty between India and US then as mentioned in this thread.
Still confused...
pralay said:
Questions related to Form TD F 90-22.1
Hello Friends/specialists!
I now understand the rules for "Report of Foreign Bank and Financial Accounts". If one is a US resident or Citizen and hold accounts outside US and the total value of the account/s (all combined) is more than $10000, that person have to file this form "TD F 90-22.1" to the treasury department.
My Questions:
--------------
1. The aggregate value of account/s is more than $10000, not just the interest portions valuing more than $10000, correct? The total value of NRE account can be $50000, the interest earned is only $1500 (@ 3% PA) for example, we still need to file this form to Treasury right? Or since the interest in from this account is only $1500 it is not needed to report?
2. NRE account is not taxible in India so far which everyone knows about, but again I am given to understand that it is taxible in US for US Citizen or resident, that's understood. Without getting a 1099-INT or any other form or statement about the interest earned for the calendar year from the NRE account, how one can show the interest earned from that account?
3. No 1099 and hence it will be difficult to report interest income. Is it enough that we declare Account or we have to calculate the interest close to the best or correct value as below and sumbit the value with Schedule-B after usual US income report from local banks? This case, IRS do not have a copy from the bank themselves and how can they take it as correct value or where they can cross check with? Is is tough to understand and seems a bit complicated.
For example, Just get or ask a statement for all interest earned from Jan 01 2008 to Dec 31 2008 from the bank where the account is and use one exchange rate (say the rate on Dec 31 2008 - close of the year) or use the correct exchange rate for each time when the interest is paid and covert to dollars before reporting? How this works and whether we have report this or just declare the entire account value to Treasure via the form TD F 90-22.1 is good enough?
Any suggestions/input/advise is greatly appreciated. I just received my GC (just by end of March 2008) and hence was reviewing/researching about this topic and also got to know about this from one of my friends. Otherwise I would not even know about this.
Thanks in advance for all your time and effort to answer. Please feel free to write an email if you want/can to "anandyrsk@yahoo.com"
Hello Friends/specialists!
I now understand the rules for "Report of Foreign Bank and Financial Accounts". If one is a US resident or Citizen and hold accounts outside US and the total value of the account/s (all combined) is more than $10000, that person have to file this form "TD F 90-22.1" to the treasury department.
My Questions:
--------------
1. The aggregate value of account/s is more than $10000, not just the interest portions valuing more than $10000, correct? The total value of NRE account can be $50000, the interest earned is only $1500 (@ 3% PA) for example, we still need to file this form to Treasury right? Or since the interest in from this account is only $1500 it is not needed to report?
2. NRE account is not taxible in India so far which everyone knows about, but again I am given to understand that it is taxible in US for US Citizen or resident, that's understood. Without getting a 1099-INT or any other form or statement about the interest earned for the calendar year from the NRE account, how one can show the interest earned from that account?
3. No 1099 and hence it will be difficult to report interest income. Is it enough that we declare Account or we have to calculate the interest close to the best or correct value as below and sumbit the value with Schedule-B after usual US income report from local banks? This case, IRS do not have a copy from the bank themselves and how can they take it as correct value or where they can cross check with? Is is tough to understand and seems a bit complicated.
For example, Just get or ask a statement for all interest earned from Jan 01 2008 to Dec 31 2008 from the bank where the account is and use one exchange rate (say the rate on Dec 31 2008 - close of the year) or use the correct exchange rate for each time when the interest is paid and covert to dollars before reporting? How this works and whether we have report this or just declare the entire account value to Treasure via the form TD F 90-22.1 is good enough?
Any suggestions/input/advise is greatly appreciated. I just received my GC (just by end of March 2008) and hence was reviewing/researching about this topic and also got to know about this from one of my friends. Otherwise I would not even know about this.
Thanks in advance for all your time and effort to answer. Please feel free to write an email if you want/can to "anandyrsk@yahoo.com"
Just want to do the TD F 90-22.1 and 1040 as correctly as possible
Hence the earlier request. I am given to understand that we have to file this form before June 30 2009 for calendar year 2008 and so I have some time to do this as good and as correctly as I can. But the tax on interest without 1099 is what is confusing me.
Thanks again.
Hence the earlier request. I am given to understand that we have to file this form before June 30 2009 for calendar year 2008 and so I have some time to do this as good and as correctly as I can. But the tax on interest without 1099 is what is confusing me.
Thanks again.
nelsona
Registered Users (C)
Why was this thread not moved to the tax board?!
http://forums.immigration.com/forumdisplay.php?f=261
http://forums.immigration.com/forumdisplay.php?f=261
I have some info about this as I've talked to some CPA's. Yes if your aggregate value at any point of 2008 was greater than $10K you have to file that report. Even if you earned $0 as interest or had gold in your account it does not matter, this report must be filed or there is a huge fine.
You should know how much you received in interest in rupees. Convert that into USD on filing day by asking your bank for a suitable conversion rate, if in doubt call a CPA.
oh poor you, you got your GC, now you are stuck with not just paying worldwide income but a whole host of other taxes like gift taxes, estate taxes, capital gains tax on worldwide income etc. So next time you plan to gift a car to your children make sure IRS gets 3-4K as tax. Also the tax structure is so complex that you need to talk to several CPA's to get a clear picture.
Coming to your question, yes you have to report interest income after/with local bank interest income. IRS will never receive a copy of anything from foreign banks, if they suspect you have a lot of property/income in India, they'll file a lawsuit against you and you have to show them that you declared all worldwide income.
For your exchange rate question, please contact your bank or CPA, they have a formula/particular source for calculating it.
You have to report each bank account using TD F 90-22.1 , even if each of those accounts had less than $10K. There is space on that form to report several bank accounts.
TheRealCanadian
Volunteer Moderator
Please. There's 101 ways to give a car to someone without paying gift tax.
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hurricanemd
Registered Users (C)
There are three important issues-
1. its very important to report to IRS before June 30 , if at anytime during the whole year , your accounts were more then $10,000.
2. any income , even if its $5 or $5000 needs to be reported for US taxes
3. U can claim credit for taxes paid for that income in India or any other country
4. Now u have PAN number and other means by which your accounts can be traced , so please pay your taxes from other countries, IRS is going to be paying extra attention to foreign accounts
1. its very important to report to IRS before June 30 , if at anytime during the whole year , your accounts were more then $10,000.
2. any income , even if its $5 or $5000 needs to be reported for US taxes
3. U can claim credit for taxes paid for that income in India or any other country
4. Now u have PAN number and other means by which your accounts can be traced , so please pay your taxes from other countries, IRS is going to be paying extra attention to foreign accounts
You should have worked out by now that 'atrayapr1' has a bee in his bonnet about the US tax code because he thinks it destroys the moral fabric of society. I'm not sure why he bothered to move here really.