Why is TurboTax asking me to fill out Form 8938: Interest II schedule when I don't have any interest to report?

This is actually a common confusion with Form 8938 (Statement of Specified Foreign Financial Assets). The form itself is only required if you meet certain thresholds for foreign financial assets. For unmarried taxpayers living in the US, that threshold is generally $50,000 on the last day of the tax year or $75,000 at any time during the year. For married filing jointly, it's $100,000 on the last day or $150,000 at any time. If you don't meet these thresholds, you don't need to file Form 8938 at all. TurboTax sometimes prompts for this information as part of its interview process to determine if you need to file the form. If you indicate somewhere that you have foreign assets, it will walk you through all the sections. You only need to complete the sections that apply to you. If you have no foreign interest income, then you can leave that section blank or enter zeros - but only if you actually need to file the form in the first place based on those thresholds.

After spending literally HOURS fighting with TurboTax on foreign asset reporting, I found a solution that might help you. I've been using this tool called taxr.ai (https://taxr.ai) which has been super helpful for sorting through all the foreign asset reporting requirements. I was in a similar situation with foreign accounts that didn't generate interest, and the tool helped me understand exactly what I needed to report. The website actually lets you upload your foreign account statements and it categorizes everything properly for Form 8938 purposes, separating what needs to be reported from what doesn't. It saved me so much time figuring out which sections needed zeros and which I could legitimately skip.

Just wanted to update that I tried taxr.ai for my Form 8938 issues and wow, it actually worked great! I uploaded my foreign bank statements, and it clearly showed me which accounts met the threshold for reporting and which sections needed to be filled out. Turns out I didn't need to report anything in the Interest II section since I didn't have any interest income, but I did need to list the accounts themselves. The tool generated a report that I could follow along with in TurboTax, and it made things much clearer. No more guessing games about what needs zeros and what can be skipped. Definitely saved me a headache!

If you're stuck in an endless loop with the IRS forms in TurboTax, I totally get it. I had a similar issue and spent hours waiting on hold with TurboTax support. Eventually I found this service called Claimyr (https://claimyr.com) that got me through to an actual IRS agent who explained exactly what I needed to do with Form 8938. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed that you only need to report sections where you actually have values to report. If you have no interest income from your foreign accounts, you don't need to fill in zeros in the Interest II schedule - as long as you're properly reporting the existence of the accounts elsewhere on the form if you meet the threshold.

I need to apologize for my skeptical comment earlier. After waiting on hold with the IRS for over an hour and getting disconnected twice, I broke down and tried Claimyr. Within 45 minutes, I was actually talking to an IRS representative who cleared up my Form 8938 questions. The agent confirmed that if you have foreign financial assets above the threshold, you need to file Form 8938, but you only need to complete the sections relevant to your situation. If you have no interest income to report in the Interest II schedule, you can leave it blank - no need to enter zeros. Definitely worth it just to get a definitive answer straight from the source instead of guessing or relying on TurboTax's overly cautious approach.

TurboTax does this for a lot of forms - it's super annoying. I had the same issue with Schedule B even though I had minimal interest. What worked for me was just putting $0 in the required fields and moving on. As long as the amount is accurate (even if it's zero), you're good. Form 8938 is specifically for foreign financial assets, and the IRS wants to know about those accounts even if they didn't generate income. So listing the accounts with $0 interest is actually the right approach.

Has anyone actually read the Form 8938 instructions? It clearly states on page 2 that you only need to report the value of specified foreign financial assets and any income or gains. If there's no income, you still report the asset but can leave the income part blank or put zero. TurboTax is programmed to be super thorough to avoid errors, but sometimes it goes overboard and asks for info that isn't strictly necessary.