I forgot to report foreign interest income of 45$ on tax return

Asked 6 months ago - Tacoma, WA

I am US citizen and have savings account in India and getting an average of $15 a year(45$ for 3 years total) for last three years.... until I was not aware that I have to pay tax on that income on US tax return since I never got 1099-INT from Indian bank......I have already filed 2013 return and waiting for refund.
Should I amend all tax returns? starting from 2011?
Will IRS charge any penalty and interest?
If yes how can I calculate approximate penalty and interest on this 45$?
is there any online calculator I can use?

Attorney answers (3)

  1. Thuong-Tri Nguyen

    Contributor Level 20

    1

    Lawyer agrees

    1

    Answered . Let's assume you pay the highest income tax rate (about 40%). 40% of $15 is a whooping $6!

    If all you did was to not be aware of reporting $15 in interest, my practical answer would be to forget about amending any tax return. I doubt that the IRS wants to incur the expenses to review your amended return for another $6 in taxes.

    In future years, you should remember to report all your incomes. US citizens and legal permanent residents are required to pay US income taxes on their world-wide incomes unless there is a specific exemption for a particular type of income.

  2. Nicholas D. Fisher

    Pro

    Contributor Level 10

    Answered . There is an additional issue that you should also be aware of in filing your returns with a foreign bank account. Under US law, you have a duty to report your foreign accounts under the FBAR. Failure to do so can lead to massive penalties. I would suggest checking with your accountant about submitting your FBARs. It does not necessarily require an amendment of your 1040, but if you are required to file the FBAR, it may be advisable to also file an amended return for the year.

    This information is provided as a service generally and is not intended to answer any specific questions from any... more
  3. Judith Anne Thompson

    Contributor Level 5

    Answered . You should definitely amend all returns that you can. Make sure that if you file a Schedule B that the questions regarding foreign bank accounts and foreign trusts are answered. You must also do FBAR -Foreign Bank Account Reporting if you have over certain amounts in foreign accounts.

    I am an Attorney-at-Law, licensed to practice law only in the state of Indiana. Unless we have both signed a... more

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