International Bank Account Interest (few dollars) - reported on 1040 but skipped Schedule B. Need to amend?
I've maintained a small bank account in another country since 2014. The balance has always stayed under $10,000, so I've never needed to file an FBAR. The interest I earn on it is minimal - just a few dollars each year. Every tax season I've dutifully reported this tiny amount of foreign interest income on my 1040. However, I recently discovered that regardless of how small the amount is, I might have been supposed to file a Schedule B because the interest comes from a foreign source. I've never included Schedule B with my returns since the interest amount is nowhere near the $1,500 threshold that normally triggers the requirement. Now I'm wondering if I've been doing this wrong all along. Do I need to go back and file amended returns with Schedule B for previous years? Or is this such a minor issue that I can just start including Schedule B going forward? Really don't want to trigger any unnecessary flags with the IRS over a few dollars in foreign interest.
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Finnegan Gunn
You're correct that technically Schedule B is required for any amount of foreign interest, regardless of the $1,500 threshold that applies to domestic accounts. However, I wouldn't stress too much about filing amended returns in your situation. Since you've properly reported the interest income on your 1040 each year, you've already disclosed the most important part - the taxable income. The IRS generally doesn't pursue amendments for technical form omissions when all income was properly reported and taxes were correctly paid. Going forward, I would recommend including Schedule B with your returns. On Part III of the form, you'll need to check "Yes" to the question about having a financial account in a foreign country. This provides the disclosure the IRS is looking for regarding foreign accounts, even when they're below FBAR thresholds.
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Miguel Harvey
•Thanks for the info. I'm in a similar situation but I've never reported my foreign account interest (about $12/year) at all. Should I be worried and file amended returns, or just start including it going forward?
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Finnegan Gunn
•Since you've properly reported all income on your tax returns, there's no tax underpayment issue here. The missing Schedule B is primarily a disclosure form in your case. For such small amounts where all income was reported, simply start filing Schedule B correctly going forward. Regarding your situation with unreported interest, even though $12/year is a very small amount, technically any unreported income is still unreported income. I would recommend starting to report it going forward, and you might consider a quiet disclosure by filing amended returns for the last three years.
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Ashley Simian
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Oliver Cheng
•How does taxr.ai work exactly? Can it actually look at past returns to check for other issues I might have missed? I've had a German account for years and now I'm paranoid about what else I might be doing wrong.
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Taylor To
•I'm skeptical about these AI tax services. Wouldn't you need a real tax professional to review something like foreign account reporting? The penalties for foreign account mistakes can be massive.
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Oliver Cheng
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Taylor To
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Savannah Glover
Just to add another perspective - I'm a longtime expat with multiple foreign accounts. The key distinction is between tax compliance (reporting income) and FBAR/foreign account disclosure compliance. You've met your tax obligations by reporting the interest on your 1040. The Schedule B requirement is part of the disclosure regime. While technically required, the IRS is far more concerned with unreported income than with missing a Schedule B when all income was properly reported. Focus on compliance going forward, and don't stress about amending returns when no tax was underreported. This is a common oversight among people with small foreign accounts.
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Felix Grigori
•Do you know if the same logic applies to Form 8938 (FATCA reporting)? I just realized I might have needed to file that too even though my accounts are under the FBAR threshold.
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Savannah Glover
•Form 8938 has different thresholds than the FBAR requirement. For U.S. residents, you only need to file Form 8938 if your foreign financial assets exceed $50,000 on the last day of the tax year, or $75,000 at any time during the year (higher for married filing jointly). For overseas residents, the thresholds are much higher - $200,000 on the last day of the tax year or $300,000 at any time during the year ($400,000 and $600,000 for joint filers). So if your accounts are under the $10,000 FBAR threshold, you almost certainly don't need to worry about Form 8938.
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Felicity Bud
Has anyone used TurboTax for reporting small amounts of foreign interest income? Does it automatically generate Schedule B when you input foreign interest, or do you have to know to add it yourself?
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Max Reyes
•TurboTax will create Schedule B automatically if you check "Yes" to the question about having a foreign account during the interview process. However, it won't force you to create Schedule B based solely on having a few dollars of foreign interest unless you specifically tell it that the interest is from a foreign source.
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