Relating IRS Schedule B w FBAR form: confusion

I've found all the FBAR info on this forum helpful thanks!

But, I have some additional Qs, about the relationship between filling out Schedule B (with your regular IRS forms in April) and submitting the FBAR in June. I cant seem to find the answer (I've read the thread on Schedule B already), and I'm confused.

1) I understand that BEFORE even completing the FBAR form which isnt due until June, you ALSO have to complete Schedule B w your regular IRS filing in April, noting the fact that you actually have a UK account? Is this correct?

2) If so: On the Schedule B, Part III, it seems that on Question 7a you say "yes"; and 7b you say "UK". Is this correct?

Now here is another big Q:
3) On Part I of the Schedule B, do you ALSO have to list your specific UK savings account there, along with the interest you earned during the last year? I've read one or two threads that say you do; but I dont see anything in IRS site that says you do. Because it seems that bank savings acct "interest" is very different from reporting the fact that you have a UK account via FBAR. And because I've seen over and over that the FBAR is not technically related to your IRS reporting figures.  Right now all I have reported on Part I is the paltry interest income from my one US savings account.

4) How do you even figure out the interest on your UK savings account? I dont recall getting any yearly document with that amount noted. Also, dont we already pay UK taxes on UK bank account interest, and isnt it already taken out of our UK account (unlike in the US where you report it and possibly pay tax via your IRS forms).

5) General advice:  The joint account I have w my spouse was for a few months of the year, over US$10,000 (hence all this reporting needed); but I'm currently not working. If anyone else is in this situation, I'd appreciate any advice for the future.

Thanks!!!

1 & 3) You must include the UK account on Schedule B and state the gross amount of interest received in the 2009 US tax year in addition to your US interest. Form 1040 is to report your tax situation for the year to the IRS, the FBAR's are a declaration to the US Treasury that you have signature authority over a foreign bank account. They're not the same thing.
2) Yes. On 7b, UK is probably OK, but they may prefer "United Kingdom". (pedantic)
4) Some UK banks send out periodic statements, some don't send you a statement until a month or two after the end of the UK tax year (April 5th). If you don't have any statements, contact the bank to clarify any amounts paid from Jan. 1, 2009 to 31 Dec., 2009. They may not understand why you're asking for this specific information. Just tell them you do need it for US tax reporting. UK banks withold 20% of the gross interest for taxes, unless you have instructed them otherwise. You then claim back the taxes paid to the UK using Form 1116 (passive) on your US taxes. You may not need the 1116 if your taxes are reduced to $0 on 1040 due to deductions and exemptions.
 

Just to clarify, Schedule B and FBAR are two completely separate things.

Schedule B is also for reporting US interest and dividends above a certain amount, as well as interest and dividends from foreign sources.

Schedule B is for showing how much interest or dividend income you earned to make sure you are paying the correct tax on it - this income can be from anywhere.

FBAR is for showing that you aren't sneakily hiding money in foreign bank accounts so you can do bad things with it.

The two forms also get mailed to two different places.

Thanks so much. I also just talked to an IRS international person in Philly. I wish my tax guy (who does have a number of US clients abroad) didnt tell me these changes needed to my Schedule B and 1116 form.

I should also mention that in 2009 I did not work at all, didnt earn a penny in either US or UK (married UK citizen, NRA). So all I'm reporting is my various interest incomes. It seems unfair that I may pay tax on what is really my spouse's earnings, but I suppose we should have thought of that when establishing a joint bank account.

Now I have to call my bank here and ask these Qs about interest and tax in 2009. Does anyone have any helpful experiences in getting UK banks to give that kind of info? Are they generally able to do it over the phone, or is it better to somehow get it in writing? I imagine all of you have to do this every year, so are accustomed to it.

It seems unfair that I may pay tax on what is really my spouse's earnings, but I suppose we should have thought of that when establishing a joint bank account.

But you're not paying tax on  his earnings (his salary), you're paying tax on the interest you gained by having his earnings put in a bank account that you have access to. The interest income was paid to you by the bank, not by your husband's employer.

In other words, if he had taken his salary and stuck the money  under a mattress instead of putting it in the bank, you wouldn't have any income to report.

Now I have to call my bank here and ask these Qs about interest and tax in 2009. Does anyone have any helpful experiences in getting UK banks to give that kind of info? Are they generally able to do it over the phone, or is it better to somehow get it in writing? I imagine all of you have to do this every year, so are accustomed to it.

Do you have online access to the bank account?  If so, it should include the option to see all of your statements that cover the period January 1, 2009 to December 31, 2009.  Just print off the statement (or statements) and keep it/them with your 2009 tax records. (In case you need to remind yourself next year what you had done..!)

Just add up the interest amounts that were paid during that period, and convert them to US dollars (simplest method; use the exchange rate for 2009 that you'll find on the US Embassy, London, site.)  Enter that amount in Pt. 1 of Schedule B.

Just to emphasise, it is not the period for which the interest is paid that matters, but that the payment was made in the period 1/1/09-12/31/09.  (For instance, I have a savings a/c that only pays interest once a year, on March 31st.  The interest amount that was paid on March 31st, 2009, is the interest I declare and pay US taxes on for 2009.)  I live in the US and have tax-free accounts in the Isle of Man, so do not have to worry about tax credits for tax paid in another jurisdiction..