robin1234

Meh. I like to keep things simple, and only keep records in paper format. I just re type the whole thing, copying from last year, just changing the $$. Takes maybe 20 minutes (I have three or four accounts to report.)

navman

Filing a tax return shortly and new to FBAR.

There is one thing reporting bank account balance and interest gained in the UK but do we get double taxation i.e get taxed for Interest in UK and the USA (double taxation)?

mrken30

I think the answer is yes unless you can be bothered to claim the tax back from the UK. It all depends how much interest you are talking about

lansbury

If you have filed the form with HMRC to be exempted from UK income tax, they will refund any tax your bank deducts from interest. I have had a check the last two years without doing anything from my end. Have given up trying to get Natwest to pay the interest without deducting the tax.

navman

Is there any way the US tax man would take the interest paid in the UK into account?

robin1234

It is your responsibility to declare the gross interest you received in bank interest. So, if you got £80 interest from a British building society savings account, you need to gross it up (£100 probably?), and enter that amount in dollars in your 1040 schedule B, just the same as if it was interest from a domestic US bank account. If your UK bank is on the ball, they know you are a U.S. Taxpayer and will be passing your account details on th the U.S. Treasury. If, for whatever reason, your British bank doesn't know you are a U.S. Taxpayer, you should tell them.

I recently opened a current account with a British bank, and as part of the process, had to declare that I was a U.S. Taxpayer, and I filled out a U.S. Form W9, I think it was...

Edited; OK, sorry, I think I totally misread your post! I believe the answer is, you need to fill in the foreign tax credit form, if you want the IRS to give you credit for foreign tax paid.

theOAP

With regards to interest paid in the UK from a bank or building society, it's worth mentioning that in a few weeks (starting 06 April 2016) all interest will be paid gross. The FI will not be withholding any tax.

As I understand it, HMRC will collate all interest paid from all FIs for any particular NINO. If the sum of all UK source income is below the personal allowance, no tax will be charged. If tax is due, then the Tax Code for the following year will be adjusted to collect the tax. If a Tax Code cannot be used, a self assessment form will be required.

Of course, all interest must still be declared to the IRS if a US return is filed.

LauraLou07

So... Just to clarify, if the most i had in my bank account at any given time during 2015 was 5000 i do not have to file FBAR?

Owen778

You don't state if pounds or dollars, but since 5000 pounds was less than $10000 all through last year, it doesn't matter.

No, you don't need to file, unless you had other financial assets outside the US, with the total value over $10000.

mrken30

Does anyone have tips on calculating the highest account balance (in dollars) over the year besides manually looking at exchange rates and account balances each month.

durham_lad

I don't look up the exchange rate every month since it is only the Treasury rate on Dec 31st that matters.

I keep a spreadsheet and each month look at the statements (I only have 2 accounts) and note the highest daily amount in pounds for each account.

End of year it is easy to pick out the highest annual amounts from the 12 entries, and then I use the Dec 31st exchange rate to convert to $.

mrken30

I always thought they wanted the highest value in dollars not sterling. In some years the rate can vary a lot and the highest amount in GBP may not be the highest amount in USD over the year.

lansbury

As durham_lad says, the only exchange rate you use is the US Treasury rate on December 31st. Hence you just need the highest amount in Sterling in the account during the year, which you use the December 31st rate to convert to dollars.

robin1234

That's ok as a rule of thumb if you had just one account, unchanged, for the whole year, January 1 to December 31. If you switched bank accounts during the year, and transferred money from one to the other, you have to count the money twice. Bring in the exchange rate ... you might be going above the threshold. Or if you had two or more accounts, and moved parts of the balance back and forth....

robin1234

I don't even do that. I just eyeball the accounts at end of year. Knowing the general trend of my three IoM accounts (income, expenditure) it takes me five minutes to pick a balance that I'm confident is the highest. For instance last year, we bought our flat. The day before I paid for it, was the highest balance in that account. Another smallish savings account, no movement except they pay interest once a year, so anytime after interest was credited was the highest balance.