Tax questions

S

Siddharth1

Registered Users (C)
Hi,

I made interest last year from my bank account in India. According to IRS, > $10K foreign bank accounts must be disclosed.

Does anyone know how I should calculate the interest? I got the money when the Rupee CD matured in November. So how do I figure out the conversion rate?

Also, I read that if you have foreign bank account you also need to report it to Department of Treasury.

I looked at the 1040 form and schedule B and the TurboTax online application but it doesn't clearly explain how to disclose this. Without a 1099 form (which I can't expect a foreign bank to provide me with), I have no idea as to how to plug the numbers. I don't want to overpay my taxes (!) but don't want to get hit with an IRS fine either.


Has anyone reported foreign earned bank interest? Any personal experiences will be highly appreciated.
 
Siddharth1 said:
Hi,

I made interest last year from my bank account in India. According to IRS, > $10K foreign bank accounts must be disclosed.

Does anyone know how I should calculate the interest? I got the money when the Rupee CD matured in November. So how do I figure out the conversion rate?

Also, I read that if you have foreign bank account you also need to report it to Department of Treasury.

I looked at the 1040 form and schedule B and the TurboTax online application but it doesn't clearly explain how to disclose this. Without a 1099 form (which I can't expect a foreign bank to provide me with), I have no idea as to how to plug the numbers. I don't want to overpay my taxes (!) but don't want to get hit with an IRS fine either.


Has anyone reported foreign earned bank interest? Any personal experiences will be highly appreciated.
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Use the conversion rate on the day the money was paid to you. Enter the result in $US as a line on schedule B.

You need to disclose your foreign accounts if the *total* value of *all* the accounts exceeds $10K. If this is the case, you will have to disclose each account regardless of its worth. This is done on form TD F 90-22.1 (available on the IRS website) and is NOT filed with your income taxes but rather is filed with the Treasury Dep't (address is on the form) in Detroit before June 30th. The form is very simple and just asks for account #, country where it is located, and if the value of that particular account is over $10K.

Brian
 
This is extremely inconvenient. There are several accounts I have in my home country some of which were opened by my parents and which I don't actively keep track of.

Even if I did keep track of these, considering that all aliens would have some or the other bank account at home, do all aliens (esp. on this board) file TD F 90-22?
 
Siddharth1 said:
This is extremely inconvenient. There are several accounts I have in my home country some of which were opened by my parents and which I don't actively keep track of.

Even if I did keep track of these, considering that all aliens would have some or the other bank account at home, do all aliens (esp. on this board) file TD F 90-22?
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I file it, but I am Canadian and the IRS and its Canadian equivalent talk to each other all the time. It takes me about 15 minutes. I know that most aliens do not file this form and they don't even know they have to. Ignorance of the law, however, is not an excuse for breaking it.

Brian
 
Anyone from India??

Thanks Brian. I will most likely pay the foreign tax.
Is there anyone from India who is in the same boat as me? What did/does he/she plan to do.
 
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Any info

Hello,

Is anyone from India in the same position?
i.e. does anyone have > $10K in a bank a/c in India?
Please let me know.
 
Just pay taxes only on money earned from USA

Siddharth, even if they did they are not going to talk about it. Why do you need to disclose your parents accounts ? no need. Just keep your offshore accounts few. Transfer all the funds that are your ancestral property earned by you or your parents in india into your parents account. Only keep under your accounts money earned from the US. On this money if it exceeds 10K in savings disclose them and treat any interest earned on that as subject to taxes by the US govt. That's agreeable even though you earned that money after paying your due taxes to the US govt on the gross income already.

But by no means is the money you inherited from your parents and which is the hard earned money coming from soil of India are you subject to any tax not from US or it's mama. If any tax that these funds are subjected to , then it should be from the Indian govt and no one else.

Fellow Indian
 
No that would be advisable only after one becomes a permanent citizen of that country. Then only it's fair. Otherwise they need to ammend that law. But so long as advocatores like you who never question any law as long as it brings revenue exist, this law cannot be repealed. We need to reach out to a few just Americans for this purpose. And there are a few who are impartial.
And Just because it's US law IT'S NOT "PERIOD". Ok ?

And get your history straight. Alcapone was convicted on tax evasion as that was the last and only thing they could get him on. They couldn't get him on murder,breaking prohibition, prostitution, gambling or drug smuggling for several years. So it finally dawned on them they could get him on tax evasion. It was not the first thing they went after. OK wise guy?
 
immiprtlbond said:
No that would be advisable only after one becomes a permanent citizen of that country. Then only it's fair. Otherwise they need to ammend that law.
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Why should they? The law states that tax residents of the US (that could be citizens, LPRs, or non-immigrants meeting SPT) need to declare and pay tax on their worldwide income. End of story.

If IRS finds out, then they nail you for penalties and retroactive interest going back to the original point when you received the income.

Your and my respective notions of fairness are interesting discussion over a drink, but completely irrelevant.
 
Posted by The Real Canadian :
Your and my respective notions of fairness are interesting discussion over a drink, but completely irrelevant.
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Although I do agree with the immediate practicality of your statement there, I do believe firmly that an ammendment need to be made to this rather oppressive law and somebody well connected in the US (perhaps of foriegn origin) must take up this cause. An association should be formed of all H1B's and PR's that are effected by this ruling as well as all the right thinking peoples. A case can be filed against the federal govt for this unjust practice. It'l be like David taking on Goliath but is still worth a fight.
 
immiprtlbond said:
A case can be filed against the federal govt for this unjust practice. It'l be like David taking on Goliath but is still worth a fight.
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There's nothing unjust (and certainly not illegal) about the principle of taxation on worldwide income. Canada does this I believe, and it wouldn't surprise me if a lot of other OECD nations did this as well.

From a public policy notion, if foreign investments and income sources have a more favorable tax treatment than domestic ones, then there's a powerful incentive to expatriate your capital, reducing domestic investment.

Politically, what you're suggesting is that a group of individuals who have no vote (LPRs and non-immigrants) attempt to suggest to US citizens that the tax laws be amended so that these non-voting foreigners pay less tax - and by implication, the US citizens would therefore have to pay more tax to make up the lost revenue.

Sorry to put it bluntly, but that's like asking turkeys to vote for Thanksgiving. :) Isn't going to happen.
 
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