Reporting Foreign Interest

[rsargant]

I cannot, for the life of me, figure out where I'm supposed to report Foreign interest on my U.S return.

Is it on schedule B along with my U.S based interest?
If so, where do you indicate the country that the foreign interest is from?

I am U.S resident, but have an ING Direct Canada savings account with a fairly low balance. It was over 10K at one point of the year and has earned some interest. I am planning on reporting it on TD F 90-22.1, but I assume I should also report the interest as U.S taxable income.

I'm just not sure where to put it!

[nelsona]

You report it as interest (in US$) on Sched. B. The source doesn't really matter in terms of reporting the income. At the bottom of Schedule B you indiciate that you have foreign accounts, and if your entire foreign account holdings is greater than $10K US at any time during the year, then you report all accounts on the TD F 90-22.1 as well.

ING should be withholding 10% of the interest you get as tax (are they?) because you are a non-resident of canada. You can use this tax on a form 1116 to get credit for it on your 1040.

[rsargant]

Thanks very much.

They are withholding 10%, have been since I told them I moved which
was pretty close to when we arrived here.

Thanks for clearing that up as well, I wasn't sure if they were witholding that on behalf of the Canadian Government or the U.S Government.

Do I need to do a non-resident CDN return every year to square up with the cdn government? Is that 10% witholding tax, tax that I actually OWE on that interest because I'm non-resident, or just witholding? That is my only CDN source income. If so, that is kind of a pain, I may just close the account.

[nelsona]

The 10% is flat non-residents tax, at the rate for US residents. It is your final obligation to Canada on that income. You do not file a Cdn return for that income.