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I live in the US and am a US resident for tax purposes. However I am originally from the UK and I have an account there. This is an account with very little money in it. At most there has been $5000 in it over the past several years. A more typical balance is $1000, but never anywhere near $10,000. I therefore know I do not need to fill out an FBAR, although I do acknowledge this account on schedule B.

My question is, do I need to declare the very small interest that this bank account makes each year on my US taxes? The foreign account receives no income, only money I move there myself.

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  • Thanks all for the answers and comments. Turns out that my overseas bank doesn't give me any interest. I declared the accounts all the same
    – GeoMonkey
    Feb 14, 2022 at 20:07

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Yes, all income must be declared. Unless either:

  • if your total income is less than the limit for filing a return.
  • The income from that source is less than fifty cents, when it can be rounded down to zero.

Foreign income is definitely included. FBAR reporting limits are not relevant.

In reality, the IRS will almost certainly not care if you fail to report tiny amounts of income. It costs them more to process and verify than they will get. But the letter of the law is that you must report it.

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  • Yes, FBAR rules and limits do nothing to change that worldwide income needs to be reported by US taxpayers.
    – Peter K.
    Feb 13, 2022 at 15:31
  • Thanks, what if there is no income in the account, just the tiny tiny % that naturally builds with interest. It's likely that it's not even $1
    – GeoMonkey
    Feb 13, 2022 at 15:56
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    Interest is income - that's what you need to declare. Feb 13, 2022 at 17:30
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    @GS-ApologisetoMonica Actually, the IRS says that amounts below $0.50$ need not be reported at all, but larger amounts do, even if the taxpayer does not receive a Form 1099 from the bank (with copy to the IRS) reporting the interest paid. Most US banks do not create or send Forms 1099 for amounts less than $10. My US bank pays me $0.05 interest per month and I dutifully report $0.60 interest (which the IRS rounds up to $1) and does not issue a Form 1099. My _non_US bank pays me $30 in interest and does not issue a Form 1099 either. I report this amount too on my tax return. Feb 13, 2022 at 17:41
  • @DilipSarwate Fair enough re the details. I was just trying to clarify the principle, as the OP mentioned "no income". Feb 13, 2022 at 22:13
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You need to declare worldwide income, including interest on foreign accounts. From your comments the amounts sound to be minuscule, so they may round down to zero on your return (if it's less than $0.50 and you round your return numbers to the nearest dollar - it becomes $0), which is OK.

While you may not have to file FBAR or form 8938, I suggest filing them anyway.

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