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    kaushik's Avatar
    kaushik Posts: 20, Reputation: 1
    New Member
    		  
    #1

    Feb 24, 2008, 11:59 AM
    Federal tax on - bank interest
    Hello,

    I was under OPT until Oct. 2007 and changed over to H1B from the beginning of Oct. 1, 2007. With regards to filing my federal tax returns for 1040-NR, I have a question about reporting bank interest income on my tax forms.

    I have received about $ 2000 as bank interest in 2007 and the banks sent me a 1099 form. Is it mandatory that I report all my interest income to the IRS? I'm a single non dependent and have already been paying a huge amount of taxes.

    Also, all my interest income has been from my salary that I have no choice but to deposit in the bank. Isn't it wrong to be taxed twice? The salary I get is already after tax deduction and the interest that I make is from the money which is already taxed.

    Please advise me on this asap.

    Thank you very much.

    kaushik
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Mar 14, 2008, 02:08 PM
    The interest earned while on OPT is NOT TAXABLE due to your F-1 visa status.

    Interest while on H-1B IS taxable.

    Prorating it is grade school math.
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