Like most people, if you have a savings account, you’re earning interest on that account. Similar to other sources of income, you’ll need to document the income you’ve earned. Generally around February, banks will send you a copy of a 1099-INT tax form, so you may be asking “What is a 1099-INT Tax Form?”.
A 1099-INT tax form is an important document that can have a huge impact on your financial life. Be sure to keep reading to learn more about what it is and how to fill one out.
What is a 1099-INT Tax Form?
Like other 1099 tax forms, banks use your 1099-INT to record payment outside of your standard income. When you are paid with a 1099, the money that you receive is not being taxed, so when it is tax season, you have to pay it in full.
Instead of receiving miscellaneous or dividend income, you’re receiving periodic interest payments, which is taxable, so you still have to report it to the government. Regularly, financial institutions will send you the form so you can use it to file your taxes for the year.
- You will have to fill one out if you have earned more than $10 in interest.
- 1099-INT is one of the most common forms that you receive from a bank or other entity.
- The IRS knows your social security number and tax identification number.
- You don’t always have to pay taxes, because you may have other deductions.
How a 1099-INT Tax Form works?
With an version of 1099, you’ll need to figure out how much income you gained and what type of income it was . You’ll need to report all types of income on your tax return.
You have to pay taxes of all of the income, because no taxes are withheld from your 1099. Generally the 1099 form will not state how much taxes you’ve paid, but only the income you’ve received.
Once you know how much money you’ve made, you’ll need to figure out how much that could affect your tax return. There are plenty of online tools and resources that can help you figure out how much you need to pay!
What to do with a 1099-INT Tax Form
Since your financial institutions did not withhold any taxes on the interest you gained, you will have to pay that amount in full. When you are filling it out, be sure to take note of the following items that you will need to record on your tax return.
Author’s Verdict
Now you know what a 1099-INT tax form is, so the next time you file your taxes, you’ll be ready to record your income. At BankDealGuy, we have all these guides for you to be able to manage your money better! We strive to create content that will help our readers achieve their financial dream.
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