Minimal interest on savings account

I am working through my taxes and plan to use FEIE this year. I may choose FTC in the future but for now it is easier for me and no more beneficial than using FEIE.

Anyhow, my spouse and I have one shared savings account because someone gave us a cheque for our wedding made out to both of us. It earned 15p in interest last year. Where do I report this? Do I even need to?

I am filing 1040 schedule B to simply state that I have a foreign account (I do not need to file fincen as the balance did not meet the required threshold)  and I see that the interest reporting is only required for interest over $1500. So I'm confused about my laughable 15p and where to put this.

Since I am mostly tax illiterate, if it matters, here are some further details: married filing separately, adding my employer pension contributions to my earned wage reporting, have lived in the UK since Aug 2014. I did not earn enough in my first year here to even need to use FEIE.

I am planning to file 1040A, 1040 schedule B, and 2555.  I know I'm early but I need to recertify my income based student loan payments and the tex return is the easiest way to do this.

Thanks in advance!


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The 15p is rounded down to zero. Employer pensions contributions do not qualify for the FEIE.

Ah ok. So while I've included these on line 7 on my 1040, I cannot include them on the 2555.

So I'm assuming the standard deduction will take care of my employer pension contributions in terms of my tax liability?

And am I correct in my belief that by claiming my employer pension contributions now, I set myself up for a somewhat easier filing come actual retirement?


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I'm also assuming I will want to switch to FTC at some point in the future as this will also deal with any tax paid on pension payments I receive?


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I've been putting off finishing my taxes as well....partially because of the interest topic. I went down to Lloyds to try to get some info out of them......we had at least 2 different interest rates last year and our savings % is down to .05%(the lady at Lloyds told me there was a past history of the % rates on our account, damned if I can find anything). I'll just have to guess at how much money we had in the savings last year based on looking at past history in the account.......we had a fair amount of money in our savings.....I think I am just going with the .05% number which would give us an amazing £50 of interest.

I've been putting off finishing my taxes as well....partially because of the interest topic. I went down to Lloyds to try to get some info out of them......we had at least 2 different interest rates last year and our savings % is down to .05%(the lady at Lloyds told me there was a past history of the % rates on our account, damned if I can find anything). I'll just have to guess at how much money we had in the savings last year based on looking at past history in the account.......we had a fair amount of money in our savings.....I think I am just going with the .05% number which would give us an amazing £50 of interest.

I'm curious to know why you need to estimate the interest paid on your savings accounts. Is the actual interest paid on your accounts not listed in your monthly and/or quarterly statements?

I've been reporting UK interest on my IRS returns for years and the actual interest rate is not needed because I simply add up the interest paid from the UK bank statements. I do have a savings account where the interest from the previous month is paid on the 1st or 2nd of the following month but I record that in the month it was paid, not for the month it was for (if that makes sense). If I receive an interest payment on January 1st, 2017 then I consider that interest to be reported in US tax year 2017.

I'm curious to know why you need to estimate the interest paid on your savings accounts. Is the actual interest paid on your accounts not listed in your monthly and/or quarterly statements?

I've been reporting UK interest on my IRS returns for years and the actual interest rate is not needed because I simply add up the interest paid from the UK bank statements. I do have a savings account where the interest from the previous month is paid on the 1st or 2nd of the following month but I record that in the month it was paid, not for the month it was for (if that makes sense). If I receive an interest payment on January 1st, 2017 then I consider that interest to be reported in US tax year 2017.

We have been back for almost 2 years (another 5 days). We received interest on 15 April 2016 (after 1 year, the only interest that has shown up in our account).....about £550 with the special first year offer.....although the lady wasn't too sure how it was that high and neither did I. I am assuming there will be another interest amount show up in another week or so like last year. I have no idea what the % rate was after the first year......I "think" it was .25% until towards the end of 2016 when it dropped to its current .05%. The people in the bank were not able to tell me what the interest rates were.....a bit scary I thought. But she was sure there was a place when we log into our account to see past % rates on the account.....damned if I can find anything.....and talking to them personally was wasted time.

I equally have no idea why someone would want to see past interest rates? Balances, yes. Interest credited, yes. UK tax withheld until 5 April 2016, yes. Interest rates? Why oh why?

We have been back for almost 2 years (another 5 days). We received interest on 15 April 2016 (after 1 year, the only interest that has shown up in our account).....about £550 with the special first year offer.....although the lady wasn't too sure how it was that high and neither did I. I am assuming there will be another interest amount show up in another week or so like last year. I have no idea what the % rate was after the first year......I "think" it was .25% until towards the end of 2016 when it dropped to its current .05%. The people in the bank were not able to tell me what the interest rates were.....a bit scary I thought. But she was sure there was a place when we log into our account to see past % rates on the account.....damned if I can find anything.....and talking to them personally was wasted time.

I admit that does seem strange. We currently only have the one bank, HSBC, where we have savings accounts and on their website when I'm logged on the current interest rates on each account are shown very clearly, front and centre, and when the interest is paid each month it is very clear looking online and on the statements.

The only exception is the Regular Saver account which has a 6% interest rate but a maximum of £250/month can be deposited and the interest is paid at the end of 12 months along with return of principal. We each have one of those accounts and won't know what actual interest money we'll receive until next month, so for the US tax year 2016 we have no interest to report for those accounts. (We moved back May 8 last year).

Ah ok. So while I've included these on line 7 on my 1040, I cannot include them on the 2555.

So I'm assuming the standard deduction will take care of my employer pension contributions in terms of my tax liability?

And am I correct in my belief that by claiming my employer pension contributions now, I set myself up for a somewhat easier filing come actual retirement?


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You seem pretty tax literate to me. You need to keep account of the total pension contributions that you've US paid tax on as they will be a US tax free basis when you make withdrawals. I assume you are not paying tax on the gains right now.

I equally have no idea why someone would want to see past interest rates? Balances, yes. Interest credited, yes. UK tax withheld until 5 April 2016, yes. Interest rates? Why oh why?

If I could see what the interest rates were.... I could figure out pretty closely what the total interest accumulated would be. As it is.....what was the interest rate on my account in July of 2016? I don't know.....and they weren't able to tell me when I walked up to the info desk to ask. But......we evidently got more than £500 in the UK year from 15 April 2015 to 15 April 2016.....how much of that was in 2016? No idea, and I don't know what the interest rates were on our account at that time. Basically.....I just have no idea what's going on (my wife usually agrees with that one).

If I could see what the interest rates were.... I could figure out pretty closely what the total interest accumulated would be. As it is.....what was the interest rate on my account in July of 2016? I don't know.....and they weren't able to tell me when I walked up to the info desk to ask. But......we evidently got more than £500 in the UK year from 15 April 2015 to 15 April 2016.....how much of that was in 2016? No idea, and I don't know what the interest rates were on our account at that time. Basically.....I just have no idea what's going on (my wife usually agrees with that one).

If the interest on that account is only paid out once a year, in this case April 2016 then that is what you report to the IRS. For your 2015 IRS return how much interest did you report on that account? If zero, then for 2016 you report the full amount you received in April 2016.  I am obviously missing something here because even if you were still living in the USA in 2015 you should be reporting all foreign income.

You seem pretty tax literate to me. You need to keep account of the total pension contributions that you've US paid tax on as they will be a US tax free basis when you make withdrawals. I assume you are not paying tax on the gains right now.

Ah thanks. Tax always makes me feel really ignorant. I managed to get through law school and pass a bar exam, but I still feel bamboozled by taxes.

That's what I though about declaring my employer pension contributions now. I don't think I have any growth to report at the moment as I have only been paying in since last May or June.  I've not received any statements yet so I'm not even sure what is currently in there.

When I do report growth, is this done on 1040 schedule b?


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Ah thanks. Tax always makes me feel really ignorant. I managed to get through law school and pass a bar exam, but I still feel bamboozled by taxes.

That's what I though about declaring my employer pension contributions now. I don't think I have any growth to report at the moment as I have only been paying in since last May or June.  I've not received any statements yet so I'm not even sure what is currently in there.

When I do report growth, is this done on 1040 schedule b?


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I don't believe you report growth, the growth only gets taxed when you begin to make withdrawals.

Suppose over 30 years you contribute 100,000 and it has grown to 200,000. You then begin to make withdrawals and you withdraw 5% the first year, which is 10,000. That 5% is drawn equally from the basis and the growth, so 5,000 will be tax free and the following year you will start with a basis of 95,000.

If the interest on that account is only paid out once a year, in this case April 2016 then that is what you report to the IRS. For your 2015 IRS return how much interest did you report on that account? If zero, then for 2016 you report the full amount you received in April 2016.  I am obviously missing something here because even if you were still living in the USA in 2015 you should be reporting all foreign income.

No...you aren't missing anything. I'm an idiot and I finally get it. Sometimes it just takes time to sink into this thick skull of mine.