When tax season rolls around, one of the most common documents taxpayers receive is Form 1099-INT. This form, issued by banks, credit unions and other financial institutions, reports interest income earned over the tax year. If you’ve earned at least $10 in interest, you can expect to receive a Form 1099-INT from the institution that paid you. This form helps the IRS track taxable interest earnings, ensuring that individuals properly report and pay taxes on their income. Not everyone needs to file a Form 1099-INT, but financial institutions and other entities that pay interest do. As a recipient, you must include the reported interest on your tax return, as it could affect your taxable income.
A financial advisor with tax experience can help you navigate your entire tax planning process.
What Is Form 1099-INT?
Form 1099-INT is an official tax document used to report interest income earned throughout the year. It is issued by banks, credit unions, brokerage firms, and other financial institutions to any individual who earns at least $10 in interest from a particular entity. The IRS receives a copy as well, and uses this information to ensure taxpayers accurately report all sources of income.
The contents of the form provide a detailed breakdown of the interest earned and any taxes withheld. Key details include the payer’s information, the recipient’s taxpayer identification number (TIN), and the total amount of interest paid. It may also indicate any federal or state income tax withheld, especially for those subject to backup withholding. In some cases, the form may report other types of interest, such as tax-exempt interest or U.S. savings bond interest.
Individuals who have earned at least $10 in interest income from a financial institution or other entity will receive Form 1099-INT. This applies to both personal and business accounts, meaning sole proprietors and small business owners may also receive this form if they have significant interest-bearing accounts.
Note that while financial entities are required to provide a Form 1099-INT to a taxpayer whose interest earnings reach the $10 threshold, the taxpayer is ultimately responsible for reporting all taxable interest income on their tax return. Even if a taxpayer does not receive a Form 1099-INT, they are still required to report taxable interest income.
How To File Form 1099-INT (And Who Must File)
Any financial institution, business, or entity including banks, credit unions, investment firms, and even individuals or businesses that pay interest on private loans may have to provide copies of Form 1099-INT. The form must be sent to both the recipient and the IRS. Even if the total interest paid is less than $10, the payer may still choose to file the form as part of their record-keeping obligations.
Filing Form 1099-INT involves several steps. The payer must first collect accurate information from the recipient, including their taxpayer identification number (TIN) and legal name. Using this information, the payer completes the form, which includes details such as the total interest paid, any withheld taxes, and the payer’s information. Once completed, a copy must be provided to the recipient by January 31 and submitted to the IRS by February 28 if filing by paper, or by March 31 if filing electronically.
For electronic submissions, the IRS requires businesses to use the FIRE (Filing Information Returns Electronically) system. Those filing on paper must send the form to the appropriate IRS processing center, which varies based on the payer’s location. Additionally, some states require a separate submission to their tax authorities, depending on local tax laws.
Form 1099-INT Requirements for Recipients
Individuals and businesses that earn at least $10 in interest income from a financial institution or another entity will receive Form 1099-INT. This applies to savings accounts, certificates of deposit (CDs), U.S. savings bonds, and other interest-bearing accounts. Even if you do not receive the form because your interest earnings were below the threshold, you are still required to report all taxable interest on your tax return.
Once you receive Form 1099-INT, review it carefully to ensure all information is accurate, including your name, taxpayer identification number (TIN), and the interest amount reported. If there are discrepancies, contact the issuing institution immediately to request a correction. The IRS also receives a copy of the form and cross-references the information. If you file a return with information that does not match the Form 1099-INT, it could trigger an automatic penalty or an actual audit.
Interest income reported on Form 1099-INT must be included on your federal tax return. For most taxpayers, this income is reported on Schedule B (Form 1040) if the total exceeds $1,500. Tax-exempt interest, such as interest from municipal bonds, must still be reported even though it may not be subject to federal taxation. If federal or state taxes were withheld from your interest payments, you can claim those amounts as credits when filing your return.
Remember that even if you do not receive Form 1099-INT, you are still legally responsible for reporting any taxable interest income. Checking your bank statements or online account summaries can help track how much interest you earned during the year and enable you to prepare an accurate return in the absence of a Form 1099-INT.
Bottom Line
A Form 1099-INT tax document provides information about interest paid to you during the previous tax year. Accurately reporting this income on your tax return can help you avoid potential penalties or audits. Keeping track of your interest earnings throughout the year can make tax season smoother and ensure compliance with IRS regulations. If you’re unsure how to handle your Form 1099-INT, consulting a tax professional can provide clarity and help you maximize deductions where applicable.
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