The tax deadline is almost here and you know the rules: Report all your incomes when filing your taxes.
Income includes your wages and any interest from your bank accounts. This interest can be as low as a few dollars and can be higher. Whatever the case may be, you are required to report it to the IRS when filing your taxes. Here is what you need to know.
What Amounts to Taxable Bank Interest?
Any interest that you receive from your bank account is taxable income. It can be your checking or savings account or a certificate of deposit. Remember, it is taxed at the same amount as your wages.
Even if it amounts to just a few pennies, you have to report interest income to the IRS.
You might get money from other sources such as savings bonds or investment accounts. Although they count as taxable income, they are handled differently.
The Paperwork for Taxable Interest
If you receive a 1099-INT form from your bank, make sure you report all your checking or savings interest on your tax return.
The 1099-INT is a short document that shows all the interest you received from your bank during the past year.
You may not get this form if the interest you received was less than $10. In that case, you can find the amount of interest you received from your bank statements.
You can easily report your taxable bank interest income on your tax return in one of the three places
- Line 8a of Form 1040
- Line 8a of Form 1040A or
- Line 2 of Form 1040EZ
Tax Help MD
Receiving an ‘interest income’ from your bank and confused whether it is taxable or not? Don’t be confused anymore. Our experts at Tax Help MD are ready to wipe off any confusion you have regarding interest income. Call us now on 888-632-4506 for free advice and consultation.