Interest Received

Forum|Forum|3 years ago
April 8, 2023
3 replies
17 views

I don't know if this is a glitch or what but I came across something that I found very odd and slightly concerning. I was set to receive a fed refund of $827 but had forgotten to include the small amount of interest I got from a checking account, a whopping $2.51. So being the good guy I opted to declare it and the moment I did my refund dropped to $816. Whole loss of $11 just for a measly $2.51, huh?

So I did some playing around and found that the threshold is $.50 (50 cents). If I drop the interest paid to .49 I get back my $11 to $827.

I don't make a lot of money, middle class guy who makes less than 70k and my taxes are not complicated and I don't have any extra income coming in that would take me to a some crazy higher bracket.

AliciaP1

Alumni - Intuit

Interest from a US bank account for that amount of money is not reported to the IRS by the bank. It has to be at least $10 for the bank to report the income.

Per the IRS the bank has to:

File Form 1099-INT, Interest Income, for each person:

To whom you paid amounts reportable in boxes 1, 3, or 8 of at least $10

For whom you withheld and paid any foreign tax on interest; or

From whom you withheld (and did not refund) any federal income tax under the backup withholding rules regardless of the amount of the payment.

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