IRS Form 1099-INT: Interest Income Reporting Guide
Important: Form 1099-INT reports taxable interest income of $10 or more paid to you during the tax year. You must report all interest income, even if you don't receive a 1099-INT.
Understanding Your 1099-INT
This form documents interest income from various financial sources.
Key Boxes Explained:
- Box 1: Interest income (taxable)
- Box 2: Early withdrawal penalty
- Box 3: Interest on U.S. savings bonds
- Box 4: Federal income tax withheld
- Box 8: Tax-exempt interest
- Box 10: Market discount
Who Receives This Form?
You'll receive Form 1099-INT if you earned:
- Bank account interest (savings/checking/CDs)
- Bond interest (corporate, municipal, Treasury)
- Interest from loans you made
- Interest from certain legal settlements
- Interest dividends from mutual funds
- As little as $10 in interest from any single payer
Tax Treatment of Interest Income
Note: Different types of interest have different tax treatments.
- Regular Interest (Box 1): Fully taxable as ordinary income
- U.S. Savings Bonds (Box 3): Taxable unless used for education
- Tax-Exempt Interest (Box 8): Reportable but not taxable
- Market Discount (Box 10): May be taxable as ordinary income
- Foreign Interest: May qualify for foreign tax credit
How to Report Interest Income
- Gather all 1099-INT forms from banks and financial institutions
- Separate taxable vs. tax-exempt interest
- Report on appropriate forms:
- Schedule B (if total interest > $1,500)
- Form 1040 (Line 2b for taxable interest)
- Form 1040 (Line 2a for tax-exempt interest)
- Claim any early withdrawal penalties as an adjustment to income
- Report foreign tax withheld for potential credit
Special Situations
- U.S. Savings Bonds: Special rules for education expenses
- CD Early Withdrawal: Penalty may be deductible
- Joint Accounts: Interest is taxable to the account owner
- Children's Accounts: May be subject to "kiddie tax"
- Trusts/Estates: Different reporting requirements apply
Recordkeeping Tips
Maintain these records for 3+ years:
- All 1099-INT forms received
- Bank statements showing interest earned
- Documentation of early withdrawals
- Records of bond purchases and redemptions
- Documentation for tax-exempt interest
Need Help With Interest Income Reporting?
Our tax professionals specialize in investment income reporting.
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