Is interest earned in Canadian savings accounts taxed at 30% by IRS? This is what I am getting after adding the foreign interest on my 1040. We have not paid tax on interest in Canada, as the income for 2012 was equal to the basic exemption (maternity benefits).
Is there any provision of the US-Canada Tax Treaty I can use to reduce the 30% tax to a lower tax? I have tried to read the Treaty and I am confused.
Our situation: Canadian citizens; left Canada in Aug 2011, residents of US for full year 2012.
Canadian bank interest taxed on 1040-US resident alien
Moderator: Mark T Serbinski CA CPA
Interest is taxed at your marginal rate, no more no less. Since you paid no tax in Canada, that is all you owe.
You should simply be adding it to your scehdule B. No need to list it specifically as foreign.
You should simply be adding it to your scehdule B. No need to list it specifically as foreign.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best