# Certificates of Deposit



## abdito (Jun 22, 2013)

Hi! I was filling my 1040 form, and I notice that I receive like $500 from a certificate of deposit from my bank here in Belgium, I wonder whether I have to report it or not, and if that so, how to do it? should I use the Schedule B? If that so? How should I fill it? Never done it before.


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## BBCWatcher (Dec 28, 2012)

Sure, you'd report all taxable bank interest on Line 8a of Form 1040, and yes, you'd file Schedule B. You'll also very likely be taking the Foreign Tax Credit (FTC) on the Belgian tax you paid on that interest. (I assume Belgium has an income tax on bank interest.)

You would also be filing a FBAR at least (judging by the likely account balance corresponding to that interest payment) and maybe a FATCA as well.


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## Bevdeforges (Nov 16, 2007)

Yes, you declare all bank interest ("worldwide income") but depending on how much unearned income you have (assuming you are filing the FEIE for your earned income), you may not need to worry about the foreign tax credit. If the income that exceeds or is not subject to the FEIE is less than your personal exemption plus the standard deduction, you shouldn't wind up paying taxes to the US.
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

Well, yes, but excess FTCs can often be useful for carrying forward and/or backward to other tax years.


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## Bevdeforges (Nov 16, 2007)

BBCWatcher said:


> Well, yes, but excess FTCs can often be useful for carrying forward and/or backward to other tax years.


It depends on your tax situation. Even in a "high tax state" your FTC may or may not be to your advantage. If the point of the exercise is to be relieved of your US filing obligation, you may elect to go the quicker route.
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

I'm referring to excess FTCs on unearned (non-FEIE) income. Sure, you can do things quickly, but excess FTCs are often useful. It's one of the few methods of reducing future (and limited past) U.S. tax liabilities should they arise.


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## abdito (Jun 22, 2013)

Hey guys, so I put it on schedule b and is less than my personal exception i did not fill anything else.. but my FBARS and the 2555-EZ, is that ok??

Also.. I'm declaring 2012 2011 and 2010? should I send the 3 to austin? 

I cannot find any other address.. so if its the case could you help me with that as well It would be pretty much appreciated

Finally as this is the first time I'm filling i put on the 3 255-EZ that i never filed a 2555 before.. is that correct?


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## abdito (Jun 22, 2013)

BBCWatcher said:


> You would also be filing a FBAR at least (judging by the likely account balance corresponding to that interest payment) and maybe a FATCA as well.


I live in belgium, never lived in the states and only gone for holiday, and I'm a student, as far as I understand.. to declare FATCA (8938 form i think) I would have to have more than 200000 in financial assets.. which by no means is the case... isn't it?


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## BBCWatcher (Dec 28, 2012)

abdito said:


> Hey guys, so I put it on schedule b and is less than my personal exception i did not fill anything else.. but my FBARS and the 2555-EZ, is that ok??


You can consider filing Form 1116 (Foreign Tax Credit) for the taxes on the bank interest. Or you can consider using the FTC instead of the FEIE, i.e. not filing Form 2555/2555EZ at all. Then you can do things like make U.S. Roth IRA contributions. Anyway, it depends on your circumstances. Ideally you'd take a little time to figure out which path is most beneficial, running your tax calculations a couple different ways. If you're the sort of person that likes shopping for bargains, using coupons, finding promotion codes, etc. then tax optimization may be appealing/rewarding.



> Also.. I'm declaring 2012 2011 and 2010? should I send the 3 to austin?


Yes. There's a variation in the general address if you're using the streamlined compliance procedure.



> Finally as this is the first time I'm filling i put on the 3 255-EZ that i never filed a 2555 before.. is that correct?


Correct.

Yes, your FATCA threshold would be US$200,000. If you don't meet the threshold then you don't need to file that form.


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## abdito (Jun 22, 2013)

Finally I send these past 3 years FBAR by mail on tuesday.. with an explanatory note.. after i did it so.. some really nice IRS information guy in france told me i should do it online.. bc of the deadline on sunday.. My guess is the FBARS will arrive next tuesday.. Any how now that I'm filling the thing online and I cant remember whether I wrote 10500 or 11000 on my FBAR of this year.. So do you think its better to let the things of this size.. or to fill online 11000? I just dont wanna get fined.. I'm keeping that money to pay my last year.. so I cant loose it pleeeease an adviceee!!!!!


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## BBCWatcher (Dec 28, 2012)

In the future please keep copies of your filings. (What if they were lost in the mail or in transmission?) That's a "rookie" mistake, so now you won't repeat it I hope.

If you choose to file online and cannot remember the amount, start by picking the one that's truthful to the facts. If both $10,500 and $11,000 could be truthful -- you just don't remember your account balance and/or have poor records -- always pick the higher amount.


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