A form 1099-INT reports all taxable interest you receive. You are required to report the amount on your federal tax return, regardless of whether or not you have to pay tax on the interest. You aren’t required to attach copies of the 1099-INT to your tax return, as long as you report the information.
Understanding the Boxes
In order to report interest correctly on your tax return, you’ll need to know what each box of the 1099-INT represents.
- Box 1: reports the total amount of taxable interest you receive. Example: interest earned on a savings account.
- Box 2: reports penalties assessed when money is withdrawn from an account before its reached maturity.
- Box 3: reports interest from Treasury notes, bonds, bills, or U.S. savings bonds. It’s worth noting that some of this interest might be tax-exe
- Box 4: reports federal tax already withheld from interest income.
- Box 8: states interest bearing investments such as municipal bonds, from state or local governments.
How to Report Interest
You have to report the total amount listed in Box 1 of the 1099-INT on the line for “taxable interest” on your federal tax return. These amounts are taxed in relation to other forms of income reported. You may be eligible to file a deduction in the section related to Adjusted Gross income, for any penalties assessed in Box 2 of the 1099-INT. Tax-exempt interest reported in Box 8 is used for informational purposes only, and is still required to be reported on your federal tax return even though you don’t have to pay taxes on it.
You need to complete a Schedule B of Form 1040 that states the amount of interest received and the responsible paying party, if your taxable interest listed on all 1099-INTs is greater than $1,500 total.