declaring money in UK
 

Hey folks.
Tax time, and am using advanced turbo tax for first time. In previous years the tax clerk has never asked about foreign savings accounts. Do I need to declare my UK savings??? I pay tax on them in Uk. They are in my maiden name.. 2 husbands.. since then. Would be hard to trace ;) If I do declare them, would I be penalized for them.... and if I don't, and get caught... might I end up in a boiler suit.

Any info greatly appreciated.
Last minute me, as per usual.

Z

Re: declaring money in UK
 

If the combined worth is over US$10,000, yes.


There is no penalty for having savings, nor will declaring them cause you any penalty. Indeed, the IRS has no interest in them... but the Department of the Treasury does. There's a reporting obligation... but that's all.

If you have such savings and do not declare them... yes, it could land you in hot water.

Ian

Re: declaring money in UK
 

The IRS would have an interest on the income generated by these savings accounts though. The OP mentions paying tax on them in the UK, so I presume there's interest income.

I would suggest that once the accounts are declared to the Treasury it would be wise to include the income in the US tax return. I'm unclear whether the treasury shares the account details with the IRS, but even if they don't today they might tomorrow...

Re: declaring money in UK
 

If you have more than $10k in foreign accounts they must be declared to the Treasury on an FBAR form.

Whatever the value of the accounts if they generate interest, dividends or gains this must be included on your US tax returns. If you have already paid UK tax on them you can take a foreign tax credit for that so you won't be taxed twice.