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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15607
Experience:  15years with H & R Block. Divisional leader, Instructor
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US Permanent resident from UK. I have a savings account in

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US Permanent resident from UK. I have a savings account in the UK. The interest is taxed in uk. Do I still have to pay tax on the interest here in the US?

Robin D :

Hello and thank you for using Just Answer,

Robin D :

You must report the interest on your US return and apply taxes to it but you are allowed to use the Foreign Tax Credit (Form 1116) to be relieved from the double taxation on the interest.

Robin D :

If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing Form TD F 90-22.1

Robin D :

The FBAR requirement named above is in addition to the taxation.

Robin D :

Please advise if you have further questions on this subject.

Robin D :

The system advises that you are "IN CHAT" but I cannot tell if you have been able to view the answer.

Robin D :

I can switch to regular Q&A but we would not be allowed to CHAT in real time if I do.

Customer:

Yes thank you. I am in a bit of a mess as didnt realise that I had to report the account on us return or know about the FBAR. I am trying to

Customer:

correct this

Robin D :

Very good

Robin D :

That is the best thing for you

Customer:

It has been since I arrived in US in late 2005. If there is no taxes outstanding due to paying them in UK will I still be in trouble.

Robin D :

Most probably not. The penalties are normally assessed on the tax liability, so if you disclose the accounts, report the interest earned (by amending your past year returns) you will be better able to know if you are going to be assessed penalties. The 1116 foreign tax credit will assist you.

Customer:

Thank you so much for your help. Have been so worried since discovering all this 3 days ago. I will work with my cpa to get this

Customer:

corrected and tell her about the 1116.

Robin D :

A CPA should already know about the 1116 but yes, tell them

Your positive rating is always thanks enough.

If you could also participate in the very short survey that Just Answer will send you by e-mail I would appreciate that very much.

Customer:

Sure will fill it out. Thanks again.

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