What is Form 1099-INT? Reporting Your Interest Income
As a tax specialist I try my best to simplify taxes, I understand that tax forms can be confusing. One of those forms for many is Form 1099-INT. I have had to file amendments for clients that had no idea that they had interest income, or they did not think they were required to include it on their tax return. My advice is to open all your mail you receive, including emails during the January through April months.
What is Form 1099-INT?
Form 1099-INT, also known as "Interest Income," is an IRS form used to report interest income paid to you during the tax year. Many brokerage firms issue a "Consolidated 1099" statement that includes all your 1099 forms (including 1099-INT, 1099-B for proceeds from broker and barter exchange transactions, etc.) in one document.
Key Boxes on Form 1099-DIV: What They Mean
While the form has several boxes, a few are particularly important:
- Box 1: Interest Income:
This is the most crucial box, showing the total taxable interest you've earned.
- Box 2: Early Withdrawal Penalty:
If you withdrew funds from a CD or similar account before maturity, and incurred a penalty, this amount will be reported here. You can usually deduct this penalty on your tax return.
- Box 3: Interest on U.S. Savings Bonds and Treas. Obligations:
These are gains the investment fund passed on to you—usually from selling stocks at a profit.
- Box 4: Federal Income Tax Withheld:
If any federal income tax was withheld from your interest income, it will be shown here. This often happens if you failed to provide your correct taxpayer identification number to the financial institution.
- Box 8: Tax-Exempt Interest:
This box reports interest from municipal bonds and similar investments that are generally exempt from federal income tax.
- Box 9: Specified Private Activity Bond Interest:
This is a subset of tax-exempt interest that might be subject to the Alternative Minimum Tax (AMT).
How to Report Interest Income on Your Tax Return:
Depending if it is tax-exempt interest or taxable interest total amounts will be reported on either line 2a or 2b of Form 1040.
You may be required to include Schedule B, Interest and Dividends if you have any of the following: (this list is complete and will include both interest and dividends that require Schedule B:
- Any return that has more than $1,500 of taxable interest income is required to complete Schedule B Interest and Ordinary Dividends.
- You received interest from a seller-financed mortgage and the buyer used the property as a personal residence.
- You have accrued interest from a bond.
- You are reporting original issue discount (OID) in an amount less than the amount shown on Form 1099-OID.
- You are reducing your interest income on a bond by the amount of amortizable bond premium.
- You are claiming the exclusion of interest from series EE or I U.S. savings bonds issued after 1989.
- You received interest or ordinary dividends as a nominee.
- You had a financial interest in, or signature authority over, a financial account in a foreign country or you received a distribution from, or were a grantor of, or transferor to, a foreign trust. Part III of the schedule has questions about foreign accounts and trusts.
FileYourTaxes.com will automatically attach Schedule B to the tax return if required. Making it seamless and simple.
