What Is Form 1099-INT? How It Works and What to Do

What Is Form 1099-INT?

Form 1099-INT is a document that reports the interest income you received during the year from various sources, such as your bank, credit union, or other financial institutions. This income is reported to you and the IRS on Form 1099-INT, and you are required to report this income on your tax return. Interest income can come from various sources, such as savings accounts, money market accounts, and certificate of deposits (CDs).

How It Works

Whenever you earn interest income of $10 or more from a financial institution, they are required to report that income to the IRS by sending you a copy of Form 1099-INT. The form will also show the interest income you received, any early withdrawal penalties, and federal income taxes that were withheld from the interest you received. As a taxpayer, it is your responsibility to report this income on your tax return when you file.

What to Do

When you receive Form 1099-INT, you must review it to ensure that the information is correct. If there are any errors, you need to contact the financial institution that issued the form to have it corrected. Then, you must report the income on the tax return for the year in which you received the interest income. If you fail to report this income, you may be subject to penalties and interest charges from the IRS.

FAQs:

Q: Where can I get Form 1099-INT?

A: You should receive a copy of Form 1099-INT from any financial institution that paid you interest income during the year. If you have not received your form by mid-February, you should contact the institution that paid you interest income to request a copy.

Q: What if there is an error on my Form 1099-INT?

A: If there is an error on your Form 1099-INT, you should contact the financial institution that issued the form to have it corrected. You should also request a corrected form to be sent to you and the IRS as soon as possible.

Q: Do I need to report interest income if it is under $10?

A: No, you do not need to report interest income if it is under $10. However, you should still keep a record of the interest income you received for your own records.

Q: How is interest income taxed?

A: Interest income is taxed as ordinary income, which means it is subject to the same tax rates as other types of income, such as wages or salaries.

Q: What if I received interest income from a foreign bank?

A: If you received interest income from a foreign bank, you must report that income on your tax return and may be required to file additional forms, such as Form 8938 or 114. You should consult with a tax professional to ensure that you are complying with all IRS requirements.

Q: Can I deduct the fees I paid to my financial institution?

A: Yes, you may be able to deduct the fees you paid to your financial institution if they are related to the production of investment income, such as fees for managing a brokerage account or CD. Consult a tax professional for more information.

Q: Do I need to report interest income from municipal bonds?

A: Yes, you may need to report interest income from municipal bonds, depending on your tax situation and the type of bond you own. Consult a tax professional for more information.

Q: What if I received interest income from a joint account?

A: If you received interest income from a joint account, the account owner who received the income is generally responsible for reporting that income on their tax return. Consult a tax professional for more information on your specific situation.

Q: What if I received interest income from a trust or estate?

A: If you received interest income from a trust or estate, you may need to report that income on your tax return, depending on the type of trust or estate and other factors. Consult a tax professional for more information.

Q: Can I receive my Form 1099-INT electronically?

A: Yes, you may be able to receive your Form 1099-INT electronically if you have provided your consent to the financial institution that issued the form. Check with your financial institution for more information.

Q: What if I lost my Form 1099-INT?

A: If you lost your Form 1099-INT, you can request a copy from the financial institution that issued the form. You should also keep a copy of the form for your records.

Q: What if my interest income is tax-exempt?

A: If your interest income is tax-exempt, you may still need to report that income on your tax return, but you will not need to pay taxes on that income. Consult a tax professional for more information.

Q: What if I have more than one Form 1099-INT?

A: If you have more than one Form 1099-INT, you should add up the interest income from each form and report the total on your tax return.