Using 2 Accounts for Extension Renewals

[BertM]

Anyone currently using 2 separate accounts for extension renewals at CW in BK? Is it absolutely for certain that TI at CW will accept using 2 separate accounts? For example:

 

Can I use a fixed deposit account for the 400k that stays year-round and use a regular savings account for the other 400k that has to go in 2 mths before the application and stay 3 mths after approval? I did the calculations and it looks like there's about a 4,000 THB difference in interest opportunity by using a fixed deposit account for the 400k year-round. At my bank, the fixed deposit account for 400,000 THB is paying 1.5% (6,000 THB interest) and the regular savings account is paying .5% (2,000 THB interest), so that's 4,000 THB per year difference. If it's absolutely certain that TI at CW will accept using 2 accounts, then I may do it, but it seems risky to do if there's any doubt for only 4,000 THB of interest. Thanks kindly...

Edited February 18, 2019 by BertM

[ubonjoe]

Immigration will at CWaccept 2 accounts. You will need a letter from the bank for each account when you apply.

I would say the majority of immigration offices will accept more than one account.

[BertM]

1 minute ago, ubonjoe said:

Immigration will at CWaccept 2 accounts. You will need a letter from the bank for each account when you apply.

I would say the majority of immigration offices will accept more than one account.

Thanks so much for the quick response... With kind regards...

[Tanoshi]

Why don't you just put 800K in a 6 month fixed term account 3 months prior to renewing your extension.

3 months after extension is issued and your term matures withdraw 400K.

Do another 6 month FT for the remaining 400K, then top up to 800K again 3 months before next extension.

 

You'll get more interest over the year that way.

[wgdanson]

52 minutes ago, BertM said:

so that's 4,000 THB per year difference

Minus with-holding tax of 15%.

[Sophon]

40 minutes ago, Tanoshi said:

Why don't you just put 800K in a 6 month fixed term account 3 months prior to renewing your extension.

3 months after extension is issued and your term matures withdraw 400K.

Do another 6 month FT for the remaining 400K, then top up to 800K again 3 months before next extension.

 

You'll get more interest over the year that way.

Since the one year interest rate on a FD is higher than the six month rate, a better plan is to put 400k in a one year FD (like the OP plans to do) and the remaining 400k in a six month FD during the seasoning period.

 

Sophon

Edited February 18, 2019 by Sophon

[skatewash]

Why don't you simply keep your 800,000 in a Krungsri Bank Mee Tae Dai savings account currently paying 1.3%?

 

1. No moving money around.
2. No concern about one fixed deposit maturing and moving the money to a new fixed deposit.
3. No concern about a fixed deposit maturing during the seasoning period.
4. No interest withholding because not a fixed deposit.
5. No need to claim back interest withheld by filing a Thai Personal Income Tax return.
6. Interest calculated daily, paid monthly, so no interest lost due to early withdrawal.
7. Only one bank letter needed.
8. Two free withdrawals per month encourage you to minimize activity in this account (withdraw once or twice a month to deposit in another day-to-day account savings account to pay current expenses).  
9. Easier, less work for the Immigration Officer, doesn't have to use a calculator.

[Tanoshi]

16 minutes ago, wgdanson said:

Minus with-holding tax of 15%.

Which you claim back, so no loss.

[skatewash]

3 minutes ago, Tanoshi said:

Which you claim back, so no loss.

I've been through the process and while I'm not going to pretend it's as much of a pain in the neck as painting the Sistine Chapel, if you don't have to do it (if no interest was ever withheld) I doubt many people would miss having to file a Thai Personal Income Tax Return.

 

Most of the difficult work is doing it the first year.  Find and visit the proper tax office (I got there in two tries), apply for a Thai Tax ID.  Hopefully, there will be someone there who speaks sufficient English to help you file your first Personal Income Tax Return.  There was for me for which I was very grateful.  The only evidence of where I lived I had at that time was my Sales and Purchase Agreement for my condo.  They made a copy of all 60 pages, each page of which I had to sign.  Then make a copy of your tax return so you can use it as an aid to file for the next year.

 

Each year:  visit your banks and ask for your interest withholding statements.  Use your tax return from last year as an aid to fill in your tax return for this year.  If memory serves it's a four-page document you can print out at home.  Take the filled out tax return and the withholding statements to your local tax office.  Wait for 3-8 weeks for a return to be mailed to you.  Take check to deposit into your bank.

 

If you read Thai or have patience you can probably file online instead which would make it a lot easier each year.

 

Or, you can open a Krungri Bank Mee Tai Dai savings account, put the 800,000 baht in, and basically forget about it.  Yes, you only get 1.3% interest this way vs. more interest that could be earned in fixed deposits.  But, your life might be a lot simpler.  Up to you.  I've done both and I know which I like better.  

[skatewash]

The interest rate mentioned in the OP for fixed deposit account is 1.5%, so the difference between interest earned in that account versus a 1.3% interest-earning Mee Tae Dai account would be (800,000 * 0.2% = ) 1,600 baht which if not huge is also not inconsiderable.  It would almost pay for your retirement extension.  I can understand someone deciding to go that way.  Once you've done it the first year it's not that hard to do every year.  I used to do it myself.  I guess I've just gotten lazy.  Of course, if you can find an account paying more than 1.5% it gets even more attractive to go that way.

[Sophon]

27 minutes ago, skatewash said:

Why don't you simply keep your 800,000 in a Krungsri Bank Mee Tae Dai savings account currently paying 1.3%?

 

1. No moving money around.
2. No concern about one fixed deposit maturing and moving the money to a new fixed deposit.
3. No concern about a fixed deposit maturing during the seasoning period.
4. No interest withholding because not a fixed deposit.
5. No need to claim back interest withheld by filing a Thai Personal Income Tax return.
6. Interest calculated daily, paid monthly, so no interest lost due to early withdrawal.
7. Only one bank letter needed.
8. Two free withdrawals per month encourage you to minimize activity in this account (withdraw once or twice a month to deposit in another day-to-day account savings account to pay current expenses).  
9. Easier, less work for the Immigration Officer, doesn't have to use a calculator.

A very reasonable way to go, although some of your points aren't really valid. Unless it's a promotion (like the step-up accounts the banks had a few years ago), a FD auto-renews at expiration so points 2 and 3 aren't an issue. And qualifying with two FD accounts of 400k/800k with no transactions definitely is not more work for the immigration officer, than going through one year of transactions on your daily transaction account. The rest are good points.

 

The one minus with your approach (for some people), is that using your daily account to qualify increases the risk of making a mistake and dropping below the required amounts. We just had a recent posting about someone whose account by mistake dropped to 799k for a few days.

 

Sophon

[skatewash]

4 minutes ago, Sophon said:

A very reasonable way to go, although some of your points aren't really valid. Unless it's a promotion (like the step-up accounts the banks had a few years ago), a FD auto-renews at expiration so points 2 and 3 aren't an issue. And qualifying with two FD accounts of 400k/800k with no transactions definitely is not more work for the immigration officer, than going through one year of transactions on your daily transaction account. The rest are good points.

 

The one minus with your approach (for some people), is that using your daily account to qualify increases the risk of making a mistake and dropping below the required amounts. We just had a recent posting about someone whose account by mistake dropped to 799k for a few days.

 

Sophon

My only experience with fixed deposit accounts was at Bangkok Bank and yes they were the ones with promotional rates.  The highest interest rates at the time where 3-month or 4-month terms.  At that time, you had to go into the bank and close the old fixed deposit account and switch to a new fixed deposit account by opening a totally new account (otherwise it would continue but at a much lower interest rate).  Since I'm American I had to do the additional IRS paperwork for opening a new account including producing an actual Social Security Card to show them.  Yes, even though I had several other accounts there, that was how they decided to comply with the due diligence necessary to comply with FATCA and other Know-Your-Customer regulations (and I can't say I blame them, either).  Also, I ended up having to report on more accounts to satisfy my yearly FBAR filing obligation (anther American-only thing). So at the time, it was a bit of a hassle, lining up the fixed terms so that it wouldn't necessitate a change during the three-month seasoning period.

 

I think that's no longer the case at Bangkok Bank and I wouldn't be surprised if it's different at different banks, but I don't have the experience necessary to comment about that.

 

I never used my Mee Tae Dai account for daily use, it was strictly for the retirement extension.  But as I lived on the money brought over for that, every month I would withdraw 30,000 or so and deposit that into my daily activity saving account which I used to pay my actual day-to-day type expenses.  The debit/ATM card associated with the MTD account was mostly kept in my home safe. I never worried about going below the thresholds in this scenario, but I could see how someone using the account for daily expenses would have to be careful.  I wouldn't want to have to live off the kindness of immigration officers if the balance every dropped below the threshold. ????  Also, there are now even more restrictions on the account (400,000 forever, and 800,000 for six months), so one has to be even more careful.

[BertM]

Just so any Americans know, if you file a US tax return, you can claim a credit for the 15% interest withholding taxes withheld in Thailand if the Thai banks issued a 1099 to the US gov't and you reported the interest as income on your tax return. I don't know if Thai banks issue 1099s because I just opened my first account with KBank and just put the 400k in it for my extension later this year, so I don't know if they do withholding or not or if they will issue a 1099 or not. I have three Citibank Thailand accounts and Citi issued a 1099 for each of the accounts, so I had to report the interest on my US tax return. I was able to claim a credit for the 15% interest withholding tax on Schedule 3 so I didn't have to pay it twice. You do not have to file Form 1116 if you only have passive income from interest overseas.

Edited February 18, 2019 by BertM

[skatewash]

1 hour ago, BertM said:

Just so any Americans know, if you file a US tax return, you can claim a credit for the 15% interest withholding taxes withheld in Thailand if the Thai banks issued a 1099 to the US gov't and you reported the interest as income on your tax return. I don't know if Thai banks issue 1099s because I just opened my first account with KBank and just put the 400k in it for my extension later this year, so I don't know if they do withholding or not or if they will issue a 1099 or not. I have three Citibank Thailand accounts and Citi issued a 1099 for each of the accounts, so I had to report the interest on my US tax return. I was able to claim a credit for the 15% interest withholding tax on Schedule 3 so I didn't have to pay it twice. You do not have to file Form 1116 if you only have passive income from interest overseas.

Personally, I think it's better to get the withheld interest refunded from Thailand than to apply for a credit on my US taxes.  I probably feel that way because as is the case with a number of retirees I have no actual taxes due because my income in retirement is small and most of my income is from interest, dividends, and capital gains.  ????  But point taken about the credit.  Of course, you can only do one or the other, get it refunded in Thailand or claim against income for US income taxes, not both.

Any interest income earned by Americans is reportable to the IRS whether a 1099-INT is issued or not.  Financial institutions aren't required to report interest earned if it's less than I think $10, nevertheless you as a taxpayer are obligated to report that income on your income tax return even if no 1099-INT is issued.  I'm a bit surprised to learn that Citibank Thailand does issue 1099-INTs to its customers in Thailand.  I don't think either Bangkok Bank or Krungsri Bank do the same, that is, I've never received a 1099-INT from either of them.

 

I do report the interest earned from my Thai bank accounts, by just filling out the interest received on a 1099-INT entry form in TurboTax (or similar) and checking the "no actual 1099-INT form received" box.  I imagine you could do the same if you go the US tax credit route.  I would imagine the IRS would accept the substitute 1099-INTs you create because the bank is a foreign bank and the IRS would know that foreign banks don't always do that (evidence to the contrary from Citibank Thailand notwithstanding).

Anyway, I do agree with your point that one shouldn't have to pay the tax twice, I just think it's probably better (in my circumstances) to get the tax refunded in Thailand than to take a credit I couldn't use to reduce my taxes due in the US.

 

Meanwhile, the non-US citizens can thank their lucky stars they are not enmeshed in the US tax system web.

Edited February 18, 2019 by skatewash