Filing Taxes - Foreign Accounts

[Siddharta]

We were talking about taxes at work and someone mentioned that all bank accounts in home country should be reported to IRS. I opened a bank account(NRE) in India before I came to US and get minimal interest income from it. Should I be declaring the income to IRS? The income is so low that I don't have to declare it in India so I didn't bother. I do not have a green card (am on H1B). Can you confirm if I am supposed to provide this info in tax returns. I did do some research on this and from news articles it seems like what my colleague mentioned is true. How do I go about providing all the info now? Is this going to impact my GC process?

[amsgc]

I have an NRE account and I get a 1099-INT every year from my bank for that account. It clearly states that the interest has been reported to the IRS and therefore must be shown on the 1040.

Originally Posted by Siddharta

We were talking about taxes at work and someone mentioned that all bank accounts in home country should be reported to IRS. I opened a bank account(NRE) in India before I came to US and get minimal interest income from it. Should I be declaring the income to IRS? The income is so low that I don't have to declare it in India so I didn't bother. I do not have a green card (am on H1B). Can you confirm if I am supposed to provide this info in tax returns. I did do some research on this and from news articles it seems like what my colleague mentioned is true. How do I go about providing all the info now? Is this going to impact my GC process?

[Siddharta]

Originally Posted by amsgc

I have an NRE account and I get a 1099-INT every year from my bank for that account. It clearly states that the interest has been reported to the IRS and therefore must be shown on the 1040.

Interesting. I never received the 1099-INT. Will talk to my bank.

[number30]

Originally Posted by Siddharta

Interesting. I never received the 1099-INT. Will talk to my bank.

CITI Bank usually send the 1099. But if you have account with ICICI or some other Indian Banks they do not send it. Also check if your bank in India deducting Tax (Usually called as TDS) on interest you earn. That amount you can deduct on US tax return as foreign taxes paid.

[Siddharta]

Originally Posted by number30

CITI Bank usually send the 1099. But if you have account with ICICI or some other Indian Banks they do not send it. Also check if your bank in India deducting Tax (Usually called as TDS) on interest you earn. That amount you can deduct on US tax return as foreign taxes paid.

You are right. I just confirmed also with ICICI(my bank) and they do not send 1099. Damn.
So what should I do now. Do I report the interest income from prior years (its very small.... less than $200/year) and file TD F 90-22.1 form this year.
How big a issue is this. Should I be very scared?

[number30]

Originally Posted by Siddharta

You are right. I just confirmed also with ICICI(my bank) and they do not send 1099. Damn.
So what should I do now. Do I report the interest income from prior years (its very small.... less than $200/year) and file TD F 90-22.1 form this year.
How big a issue is this. Should I be very scared?

Do not worry not abig deal. Just enter the amounts in $. This year Citi has used Rs 46 per $. Even I did not do it for first four years.

[nmdial]

As far as I know, one is only required to file taxes on foreign accounts if they have $10000 or more in their accounts at any time during the financial year. Please correct me if I am wrong. Also, check: Report of Foreign Bank and Financial Accounts (FBAR)

[mnkaushik]

Originally Posted by nmdial

As far as I know, one is only required to file taxes on foreign accounts if they have $10000 or more in their accounts at any time during the financial year. Please correct me if I am wrong. Also, check: Report of Foreign Bank and Financial Accounts (FBAR)

One is supposed report tax even if they make a dollar but they dont need to fill out the FBAR form if the value of all accounts put together is less than 10K.

Even i started including it my tax last year and did my FBAR form. NRE account will not be TDS only NRO accounts have TDS. Infact, you dont have to pay IT in India for NRE accounts. Thats the reason people from Middle East put their money in NRE accounts.

For 200$ they will not come after you. It is small pickings. I think you should include while filing your taxes and depending upon how much you have in the accounts you may or may not file FBAR. Remember it is all your accounts that inlcudes any savings account, mutual fund accounts, post office etc. If you have paid any tax in India then you could potentially show that in your US tax and get credit for that. I personally have not done it because my income is less than the initial tax slab in india.

[hpandey]

Originally Posted by Siddharta

Interesting. I never received the 1099-INT. Will talk to my bank.

You would receive the 1099-INT form only if your interest income is above 10 $ . If it is less than that you won't get it . That's why probably you did not receive it if you had negligible interest.

[noida123]

Indian Banks are not obligated to report interest Income and send a 1099 as they are not bound by US Laws. Citi sends it since it is a US Bank