If I received less than $10 of interest from my credit union, do I need to declare it? It looks like they are not required to send out a form unless it is over $10.

[jerry2000 · Accepted solution]

The credit union is not required to send a form if the amount is less than $10. You, however are required to report all income, no matter how small, and regardless of whether you got a form or not.
The IRS allows rounding, so an amount of 49 cents or less rounds to 0 and is not reportable. An amount of more than 49 cents is reportable and taxable.
You can find the amount of interest that your credit union paid on your year end statement. You can report that as if you got a 1099-INT (although credit unions call it a dividend, it is actually interest). Just put the credit union name as the payer and put the interest in Box 1.

[Sandyd5]

For example, if you earned $100 in interest from a bank and $9 in interest from a credit union, although the credit union did not send you a 1099-int form, the IRS states that you are required to report ALL interest earned that is $10 and up. Therefore, you are required to report the $109 interest. If you earned less than $10 in interest total (from all your financial institutions) then you are not required to report the less than $10 interest earned.

[nanajmd]

So you don't have to report less than $10?

[VolvoGirl]

@nanajmd
The post from Sandyd5 is wrong.  You must report all your income no matter how small.  You must report all your interest that's $1 or more.  Even if the total of all your accounts is less than $10.

Enter it like you did get a 1099INT
Federal Taxes tab
Wages & Income
Choose Explore on my own or I'll choose what to work on  (if it comes up)
Interest and Dividends
Interest on 1099INT - Click the Start or Update button

Put the interest amount in box 1

[Sandyd5]

Thanks VolvoGirl, I stand corrected. I was referencing an old H&R Block standard.

Here is the 2014 IRS publication to reference on page 5
<a href="http://www.irs.gov/pub/irs-pdf/p550.pdf" rel="nofollow" target="_blank">http://www.irs.gov/pub/irs-pdf/p550.pdf</a>

[rchromatic]

Ok, but the Bank pays tax from interest, how do I know which numbers I should put to the form?

[ufd]

If I'm not using TurboTax to file my taxes, and reporting with the paper forms, how do I report interest/dividends I didn't receive a 1099-int for [b/c it was too small for bank to report]? I add it to my total income from interest, but where or how do I let the IRS know where the additional small amount of interest/dividends came from?

[VolvoGirl]

Unless you have to include a Schedule B you don't need to say where.  Even on Schedule B you could just say "Interest less than $10" or "Other Interest"

[Armandon]

I would say to declare it.  The software should recognize that it's under a certain amount and it won't affect the end result (you won't be taxed on it).

The reason it matters is that you could have accounts with other banks/credit unions that have also issued interest/dividend payments.  It's the accumulation of the accounts that matter.  So if the aggregate meets a certain level, then you are taxed in a certain way.

Think of a yard sale.  If you sell one $200 item, it doesn't really matter.  You're not going to get taxed on it and submitting it is more for the completeness of your records.  However, if you have 100 yard sales and sell the item at each, then yes, you would be taxed on the $20,000.  It's the accumulation/aggregate over the year that the IRS cares about.

To ensure that people file their taxes correctly and don't slack on the math, the IRS has made it mandatory to file all sources of income, no matter the amount.  However, just because you file it, does not mean you will be taxed on it.

[VolvoGirl]

I once added $6 of interest and my Tax due increased $12!  I was right at the line on the tax table and it pushed me into the next level.  It doesn't only matter what other interest/dividends you have but ALL your other income.  You are taxed on the total income.

[Armandon]

That is correct; it's all income.  That's what makes it an "income tax", whether the income is from an employer or from investments.  Income is literally what money has come into your pockets.  However, there are other requirements for certain kinds of investments, for instance Stocks / Options.  Also, there may be ways to offset your income with other programs like donations, or 501(k)/thrift contributions, but that is beyond the scope of the question.

[r1et]

No you do not need to claim it, since the amount is under the threshold for claiming it. 

[dontbeanidiot]

YOU MUST REPORT ALL INTEREST NO MATTER WHAT IT IS, WHETHER YOU GET A 1099 OR NOT.  IT IS NOT THAT HARD OF A CONCEPT TO UNDERSTAND.  SHEESH

[dontbeanidiot]

yes you do. i don't know where you people get your mis-information at.