What to Do With 1099-INT?
Many taxpayers wonder what to do with 1099-INT tax form and what the 1099-INT tax form is used for. Tax form 1099-INT are reserved for interest income and penalties from early withdrawals.
About 1099-INT form
Taxable interest income is reported on tax Form 1099-INT. Taxable interest includes:
taxable interest from bank accounts
taxable interest from savings bonds
taxable interest from other sources
I received very small amount of interest income on tax form 1099-INT, do I need to report it to the IRS?
Yes. No matter how small the interest income is on the tax form 1099-INT, you need to report it on your income tax return.
I did not receive a 1099-INT tax form, do I need to report my interest income?
Yes. Sometimes, 1099-INT tax forms can go missing. Just because a taxpayer did not receive a 1099-INT form doesn't mean the taxpayer did not need to report interest income. Sometimes, the 1099-INT tax form is not sent out and the taxpayer assumes that the interest income was too small to be required to report to the IRS on income tax return. This is not the case, all interest income needs to be reported whether a 1099-INT form is received or not.
Where are penalties reported?
If funds were withdrawn from a deferred interest account before maturity, the taxpayer will have to pay a penalty. Penalties are reported in Box 2 of form 1099-INT which can be deducted as an adjustment on IRS tax form 1040.