IRS: Minimum interest?
Moderator: Mark T Serbinski CA CPA
IRS: Minimum interest?
Last year I accrued about $7 in interest in my Canadian Bank account. 10% NR tax was withheld on 12 monthly payments. Does the IRS allow some minimal amount of interest to go unreported? I’m assuming1116 is not mandatory. I’m getting lazy.
Every penny of interest is reportable (obviously). This is the same in US or Canada. You will note however that the tax tables are incremental (unlike canada) so you only pay tax on 'chunks' of income.
But if 10 cents of interest puts you into the next chunk or not, so be it, you still have to report it.
The foreign bank account reporting is also mandatory, if it, along your other foreign holdings, were EVER more than $10k during 2004.
Form 1116, on the other hand, is completely optional since it is a credit -- the same is true for any credit or deduction: it's your choice to claim it or not.
In fact, if you worked out 1116 for the 70 cents of tax you paid, the credit would be zero anyways, so don't bother.
<i>nelsona non grata... and non pro</i>
But if 10 cents of interest puts you into the next chunk or not, so be it, you still have to report it.
The foreign bank account reporting is also mandatory, if it, along your other foreign holdings, were EVER more than $10k during 2004.
Form 1116, on the other hand, is completely optional since it is a credit -- the same is true for any credit or deduction: it's your choice to claim it or not.
In fact, if you worked out 1116 for the 70 cents of tax you paid, the credit would be zero anyways, so don't bother.
<i>nelsona non grata... and non pro</i>