You have two options. You can take the accrued interest as you go and pay taxes as it is earned. You won't get a 1099 in the mail but you will be able to get the accrued interest from the statements. You need to track the amounts that you have paid tax on as you go and then when you do receive the 1099 when the CD matures you will subtract the interest that you already paid tax on from the amount shown on the 1099 and put the rest on the tax return.
However, because the interest on a CD isn't really yours until it matures then you can wait and report it all at once when you get the 1099. That makes the reporting easier but it doesn't split the tax bill.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
