Do I have to report my Mexican bank interest on my US return?
Yes. US citizens report all interest income worldwide, and Mexican bank interest goes on Schedule B (Form 1040), Part I — even though no Mexican bank will ever send you a 1099. The absence of that familiar slip is exactly why this income gets forgotten, and an unreported foreign account with visible interest is one of the easiest audit flags the IRS has.
Where the interest goes
The IRS says it directly: federal law requires US citizens and resident aliens to report worldwide income, and "in most cases, affected taxpayers need to complete and attach Schedule B, Interest and Ordinary Dividends, to their Form 1040." Interest from a BBVA, Banorte, Nu, or CETES account is listed payer by payer in Part I of Schedule B, the same as interest from a US bank. You must file Schedule B if your taxable interest exceeds $1,500 or if you had a financial interest in a foreign account at any point in the year — so most Americans with a Mexican account need it regardless of the amount.
Part III of Schedule B then asks the foreign-account questions: did you have an interest in or signature authority over a foreign account, and in which country? Answering "Mexico" honestly is not what gets you in trouble — it is the standard disclosure that pairs with the FBAR.
What Mexico does with the same interest
Mexico withholds tax on bank interest too. For 2026, the provisional ISR withholding on interest paid by the financial system is 0.90% per year (Ley de Ingresos de la Federación 2026), up from 0.50% in 2024–2025. This is a provisional payment, not the final tax: at the annual return, SAT computes the real tax on real interest (nominal interest minus inflation) and credits the withholding. If too much was withheld, the excess comes back as a refund.
That Mexican tax is useful on the US side: you claim it on Form 1116 as a Foreign Tax Credit against the US tax on the same interest. Keep the Mexican constancia de retención (withholding certificate) — it is your proof.
The reporting stack for one Mexican savings account
One ordinary Mexican savings account can trigger up to four US filings:
| Filing | Trigger | Deadline |
|---|---|---|
| Schedule B, Part I | Report the interest income (required if interest >$1,500 or any foreign account) | With Form 1040, April 15 |
| Schedule B, Part III | Disclose the foreign account and country (Mexico) | With Form 1040 |
| FBAR (FinCEN Form 114) | Aggregate foreign accounts exceeded $10,000 at any time in the year | April 15, automatic extension to October 15; filed with FinCEN, not the IRS |
| Form 8938 (FATCA) | Foreign financial assets above FATCA thresholds — $200,000/$300,000 (single) or $400,000/$600,000 (joint) for taxpayers living abroad, measured year-end/at any point | With Form 1040 |
What happens if you skip it
Unreported interest is unreported income, and the IRS does not need a 1099 to find it: FATCA reporting from Mexican banks, the FBAR itself, and Schedule B Part III all point at the same accounts. FBAR penalties are separate from the income-tax penalties — non-willful violations carry an inflation-adjusted penalty that reached $16,536 per violation for 2026, and willful violations go far higher. The fix for past years exists (the IRS's delinquent international information return procedures and the streamlined filing procedures cover non-willful cases), but the cheapest fix is reporting it correctly going forward.
Frequently asked questions
My Mexican bank never sent me any tax document. How do I know the interest amount?
Log into the bank's app or website and pull the annual statement or the constancia de intereses; every Mexican bank and brokerage issues one. If you truly cannot get one, reconstruct from monthly statements — and keep them.
The interest was tiny — like $40. Do I still report it?
Yes. There is no minimum for taxable interest itself; the $1,500 figure only decides whether Schedule B is required (and having any foreign account triggers Schedule B anyway). $40 of interest costs you a few dollars of tax and one line on a form.
The bank already withheld Mexican tax. Doesn't that settle it?
It settles the Mexican provisional withholding, not the US tax. The US taxes the full interest and lets you credit the Mexican tax via Form 1116. Without the credit you pay full US tax on top of the Mexican withholding.
Sources
- https://www.facebook.com/reel/1044146241578657/
- IRS, "IRS reminder to U.S. taxpayers living, working abroad" — https://www.irs.gov/newsroom/irs-reminder-to-us-taxpayers-living-working-abroad-file-2024-tax-return-by-june-16
- IRS, "Reminder: taxpayers must file and pay taxes even if they live abroad" — https://www.irs.gov/newsroom/reminder-taxpayers-must-file-and-pay-taxes-even-if-they-live-abroad
- FBAR deadlines, thresholds, and penalties — https://www.taxesforexpats.com/knowledge-center/fbar/
- 2026 ISR withholding rate on interest (0.90%, LIF 2026) — https://siemprealdia.co/mexico/fiscal/retencion-de-isr-en-intereses-bancarios/