Have you started to receive tax forms recently? It can feel overwhelming. All of these financial documents show up, and you’re expected to put them all together and pay your taxes. What do all of the acronyms and numbers mean? Is the 1099 INT the right form for you? Chances are if you receive interest from a financial institution, a 1099 INT tax form is necessary for filing your taxes. We’ll break down what you need to know below.
What is a 1099 INT form?
A 1099-INT form is used by taxpayers to report interest to the IRS. If you have made over $10 in interest, you will receive a 1099-INT form. Interest is a form of income, so if it exceeds the $10 limit, you are required to include interest on your taxes. Banks, mutual funds, brokers, and other institutions must file 1099 INT forms.
Who receives a 1099-INT form?
You receive a 1099-INT tax form when you earn more than $10 in interest from some type of financial institution. If you receive a 1099-INT form, the IRS knows that you have earned interest in the past year, and you must account for it on your taxes. You can earn interest on savings, mutual funds, investments, and more.
What do I do with a 1099-INT form?
You can use your 1099-INT form as a piece of your tax puzzle. It helps you determine your total income. You will report your earnings and total them to figure out your gross taxable income. The form also defines where the interest is coming from for your records as well.
Information included on a 1099-INT
There’s some information that you can expect on a 1099-INT. Here’s what you should expect:
- Name of payer
- Address of payer
- Name of recipient
- Address of recipient
- Amount of interest paid
- Federal income tax withheld
- State tax withheld
- Amount of interest that is tax-exempt
- Amount of interest paid on U.S. savings bonds
- Foreign tax paid
- Market discount
- Bond premium
How to fill out and read a form 1099-INT
What’s next? You need to understand and fill out your form 1099-INT. Get started today.
Box 1
In Box 1 of the 1099-INT, there should be an amount for taxable interest. So for example, if this is from your bank that houses your saving account, you should see the total interest you earned for the year here.
Box 2
If you withdraw money before an account’s maturity date, you can receive interest penalties. These are reported in box 2.
Box 3
Box 3 is all about bonds. You can find the interest that you have earned on U.S. savings bonds, bonds, bills, and Treasury notes here. Some of these bonds will be tax-exempt.
Box 4
Box 4 outlines what you are withholding for federal tax on your interest income.
Box 8
Box 8 relates to the interest you receive from investments that relate to state and local governments. This includes municipal bonds.
Do I need to declare bank interest on my tax return?
If there is an amount greater than $10 in Box 1 of your 1099 form, you must declare it on your tax return. Generally, banks will only send form 1099 INT if you earned more than $10 in interest. You have to include it in your taxable income. You also even have to report tax-exempt items like Box 8.
However, you may be able to use box 2 of the penalty amounts (if applicable) as a deduction. So check to see if you can take advantage of this.
Stop stressing about taxes and personal finances
It can feel overwhelming to deal with all tax forms being thrown your way left and right. The key is to stay organized. Gather every tax form that comes your way before you do your taxes. Then when you sit down to work through your taxes, you will have everything you need in one place. Make sure you have a bank in your corner that understands what you need.
FAQ
What is a 1099 int form?
1099 int form states how much interest you have been paid over the year. You will need to include a 1099 form when preparing your taxes.
Should I get a 1099-INT from my bank?
You can expect to receive a 1099-INT from your bank if you have earned over $10 from interest. You should receive it in the mail around February each year.
How much interest to get a 1099 int?
You need at least $10 in interest to get a 1099. You will receive this form in the mail.
