Thursday, April 19, 2012

Foreign income reporting on US Tax Return

A note on the NRPC site and also on the Yahoo Nortel pension group mentioned a new form 8938 which needs to be completed by US residents who have a financial interest in foreign banks or funds or trusts. The form is in addition to the Treasury form that needs to be completed and filed with the US treasury department. Turbotax supports this new form 8938.

You need to indicate on the software that you have foreign income or a foreign financial interest and then complete the form. You need to actually fill in the details on the form. Easystep will not take you through it.

I only found out about this new form yesterday which is unfortunately after the filing date of April 17th. If you are in the same boat you can file an amended return. Again Turbotax will guide you through that process.

If you have a bank account or RRSP or trust in Canada which is over $50,000 ($100,000for married filing jointly) you need to complete the form.
Also if you receive a pension from a Canadian company like Nortel, you need to complete the form.

You do not need to complete the form for CPP or OAP from Canada. Foreign Social Security payments like the CPP or QPP are exempt.

The form asks for a number representing the maximum value of the account during the year. For pensions, from what I can tell, you can use the total pension paid to you for the year, converted to US dollars. Check the instructions at www.irs.gov.

Tom

1 comment:

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