Solved: Federal Interest Payment
Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
BillnSuz
Level 2

Federal Interest Payment

I know that if a bank pays interest of less than $10 in the tax year I don't have to declare it.  But what if the IRS pays me interest on my 2019 refund of less that $10, do I need to report that on my 2020 return?

 

 

1 Best answer

Accepted Solutions
Opus 17
Level 15

Federal Interest Payment

I believe the bank is not required to issue a 1099-INT if the amount is less than $5, not $10.  Regardless, you are required to report and pay tax on all your income, even if you don't get paperwork.  You might not get caught, if the amount is small, but that's not a bet I would take when the payer is the IRS itself. 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

View solution in original post

5 Replies
Texas Roger
Level 15

Federal Interest Payment

You must include all interest your receive from any source regardless of whether you received a 1099-INT or not. See this previous reply: https://ttlc.intuit.com/community/taxes/discussion/do-i-need-to-report-interest-less-than-10-to-irs-...

Anonymous
Not applicable

Federal Interest Payment

all interest that is taxable is reportable even if you do not receive a 1099.  there is no rule that says under $10 isn't taxable only that the payor doesn't have to file.    Most definitely the IRS would notice the ommission but if you use the tax tables a $10 change in your income might not produce and change in your taxes 

 

 

for example, a single taxpayer with a taxable income of $20000 to $20049 would pay $2209 in federal taxes at $20050 that same taxpayer would pay $2215

Opus 17
Level 15

Federal Interest Payment

I believe the bank is not required to issue a 1099-INT if the amount is less than $5, not $10.  Regardless, you are required to report and pay tax on all your income, even if you don't get paperwork.  You might not get caught, if the amount is small, but that's not a bet I would take when the payer is the IRS itself. 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

View solution in original post

VolvoGirl
Level 15

Federal Interest Payment

See pub 550 page 16 last paragraph Form 1099-INT....

You must report all your taxable interest income even if you do not receive a Form 1099-INT.

https://www.irs.gov/pub/irs-pdf/p550.pdf

 

I once added $6 in interest and the tax went up $12! It pushed me into the next tax bracket. I was right at the line.

BillnSuz
Level 2

Federal Interest Payment

Good answer.  I live in Vegas, and I guess not getting audited would be a bet that I wouldn't take.

It isn't worth it for a $6 increas in income.

 

Thanks.

 

Dynamic AdsDynamic Ads
v
Privacy Settings