# amended taxes question



## berniej (Mar 5, 2012)

I have a question regarding amending taxes. I have to amend the last 4 years as I only sent in a 1040A as I didn’t know I had to do my Dutch income. The legal people on the base here have done them, they are part of the VITA program.
My question is, I know I have to pay back the refunds I received, but they have included the interest I received on my Dutch bank account, which is added to my income and taxed by the Dutch when I do my Dutch taxes. So in regards to the interest it gets taxed twice, when I file the Dutch taxes and when I file these amended returns.
I thought there was a something to prevent being taxed twice on interest. Or are they right and there is no exemption. Can you use the FEIE and still exempt the interest from the double taxation.

Hope this makes sense.

Thanks for any help you can give me.

Bernie McKenna


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## BBCWatcher (Dec 28, 2012)

berniej said:


> My question is, I know I have to pay back the refunds I received, but they have included the interest I received on my Dutch bank account, which is added to my income and taxed by the Dutch when I do my Dutch taxes. So in regards to the interest it gets taxed twice, when I file the Dutch taxes and when I file these amended returns.
> I thought there was a something to prevent being taxed twice on interest. Or are they right and there is no exemption. Can you use the FEIE and still exempt the interest from the double taxation.


The Foreign Earned Income Exclusion (FEIE) applies only to earned income, not to unearned income such as interest on a bank account.

There's a Foreign Tax Credit (FTC) that's available. Generally speaking, foreign tax levied on bank interest qualifies for the FTC, but read the rules carefully.

Note that the FTC can be carried backwards and forwards to a certain degree. In other words (and oversimplifying only slightly), if your Dutch taxes were higher than your U.S. taxes would have been, you can take the excess foreign tax amount that you couldn't use and apply it to one or more other tax years (either 1 or 2 years backwards and up to 10 years forward). This can be very helpful. You should keep track of any excess FTCs because you may be able to reduce U.S. taxes for a period of time at least if/when you move back to the U.S.


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