Joint Savings Account

[louise1997]

Hi! My sister and I have a joint savings account and my SSN is the one on the 1099 INT form. I haven't submitted my tax return yet but I currently am allocating 50% of the interest income to me and checking the "I am a nominee" box. I'm advising her to then claim 50% of that interest income as well. However, since the 1099 INT form is in my name, how would the IRS know that the interest income she is claiming is for this joint account? I just want to make sure the system sees that we have claimed 100% of the interest income between our two accounts. Would they be able to track it using her SSN too since I'd imagine given she's a joint owner, the account is also associated with her SSN even if form 1099 INT doesn't include it?

Thank you so much!

[LindaS5247]

Since the 1099-INT is issued in your name and SSN, the IRS doesn't know that your sister is on the joint account.  They only know a Form 1099-INT was issued to you for the amount of your interest. You can also split the interest. Save any records with your tax paperwork, just in case it gets questioned, you will be able to show that she was also on the account and how you split the interest.

In general, the IRS treats interest earned on a joint bank account as income, and all account owners are liable for taxes on their portion of the interest earned. 

To enter it in TurboTax:

1. After you enter the Form 1099-INT, your next screen will say, "Did any of these uncommon situations apply?"
2. You would select "I need to adjust the interest reported on my form."
3. Select "Continue"
4. On your next screen you will see "Tell us about your interest adjustment"
5. Enter the amount you adjusted your 1099-INT by
6. Select the drop-down for reasons for adjustment 
7. Select "I received all or part of this interest for someone else (I am a nominee).

Your TurboTax screen will look something like this:

Click here for: Instructions for Forms 1099-INT and 1099-OID (01/2024)

Click here for information on entering a Form 1099-INT.