I need to know how to report foreign bank account earnings -- How do I report interest I earned on a foreign bank account?
You must report foreign bank account earnings as part of your worldwide income if you’re a U.S. citizen or a resident alien.
Report foreign bank account interest with domestic interest income on Form 1040. You'll also file Schedule B if you had interest in or signature authority over a financial account in a foreign country
This applies even if you had less than $1,500 of total interest or dividends for the year.
Convert the foreign currency into U.S. dollars at the current exchange rate when you receive the income. If there's more than one exchange rate, use the rate that most properly reflects the income.
The income might be taxable to both the United States and the foreign country. If so, you can claim a foreign tax credit on taxes paid to the other country.
If you're identified as a U.S. person, you have to report foreign bank accounts to the IRS. This applies if both of these are true:
- You have a financial interest in or signature authority over one or more accounts in a foreign country including bank and securities accounts.
- The total value of all your foreign financial accounts is more than $10,000 at any time during the year.
A U.S. person is any of these:
- A citizen or resident of the United States
- A person doing business in the United States on a regular and ongoing basis
- A domestic corporation
- A domestic estate or trust
When you have foreign bank accounts, check the appropriate boxes on the following forms to fulfill your reporting requirements:
- Form 1040, Schedule B
- Form 1041, Other Information
- Form 1065, Schedule B
- Form 1120, Schedule N
If the foreign financial account is worth more than $10,000 at any time in the year, you must also report it on FinCEN 114: Report of Foreign Bank and Financial Accounts. You must file FinCEN 114 online.
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