# FEI Under Threshold - all exempt, Under FBAR Threshold..shouldn't be this difficult



## Costa55 (Apr 13, 2016)

Hi there, 

I have what I believed to be a pretty simple tax stance but getting lost in the paperwork. 

Filing as Married filing separately - wife is NRA
Wage from Foreign Company - $46,000 USD
Bank account in foreign country with less than $10,000 USD
Less than $1,000 interest gained on said bank account
Not required to file form 8938 

What I think I need:


- Form 2555 EZ filled out showing the $46,000 on line 18 as the end figure
- 1040 with 46,000 on line 7 and (46000) on line 21 - still not sure where to enter the small amount of interest gained and how I deduct this later on (to net to zero) or if I need to. 
- Form 8965 with Part III exemption type C and 1040 Line 61 not ticked and zero amount there. 
-Schedule B with part III, 7a as yes, the rest as no. - still not sure if I have to list my interest in Part 1 since its below $1500. 

I figured all my income was under FEIE hence I should only have lines 7 and 21 of the 1040 to cancel eachother out and net to zero but now I'm confused on where I enter the small amount of interest gained and where I can get this deducted (to net to zero) since I already took the FEIE - do I still get the standard deduction of $6,300 and that's where I take out the foreign earned interest?

Any help is greatly appreciated. 

Thanks


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## Bevdeforges (Nov 16, 2007)

The interest income goes on line 8a (Taxable interest) and this number is what's left after you follow the instructions down the first page of the 1040. It becomes your "Adjusted Gross Income" on line 37.

Flip over the 1040 (and copy the number on line 37 to line 38 on the top of the back page of the 1040). Then you follow the instructions down that page where you take your personal exemption and the standard deduction (lines 40 and 42). Both those numbers wind up being subtracted from line 38 which should leave you with a negative number - so on line 43, you get to enter 0 for your Taxable income. That lets you put another 0 on line 78. 

On Schedule B you don't have to itemize your interest if it's under the magic $1500 mark, but I do if I have multiple accounts to report just to have a record of which accounts are included. 

Sign the bottom of the 1040 and I think you're done. (Oh, well, send them in.... that's always a good last step.)
Cheers,
Bev


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## Costa55 (Apr 13, 2016)

Thanks very much Bev, I've been doing a lot of reading these last 2 weeks and I've seen you rescue a lot of forum members, you're a legend! 

Just to clarify since I was going dizzy before you helped: 

So lets say $300 interest. 

-Line 7 = 46000
-Line 8 = 300
-Line 21 = 2555-EZ (46000)
-Line 22 = 300

-Line 37 = 300
-Line 38 = 300
-Line 40 = 6300
-Line 41 = (6000)
-Line 42 = 4000
-Line 43 = 0 
-Line 78 = 0


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## Costa55 (Apr 13, 2016)

Ha. Interest on account turned out to only be $36. Still did the schedule B section III. Thanks again Bev.


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## Pitty (Apr 25, 2016)

Costa55 ,
last year i calculated my tax as you calculated here.except that in line 41 i put a negative number of -6000. but I know that puting it in the parantheses is the same as adding negative signe


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