A quick guide to filing the 1099 INT tax form: Have you received interest from the bank? You’ll receive a 1099 INT Form which reports the interest paid to you in the prior year. Every year you can expect to fill out forms to file regarding your income tax returns.
You may have heard of Form 1099 INT. But what is it exactly, and how do you file it? This is a very important question if you’re getting started as an independent contractor. 1099 is an information filing form that is used to report non-salary income to the IRS. Furthermore, the 1099 INT Form is specifically used to report interest income. We’ve provided you with more information about 1099 INT and how to file it.
When do you use the 1099 INT Tax Form?
Like other 1099 tax forms, banks or financial institutions use the 1099 INT tax form to record payments outside of your standard income. When you’re paid with 1099, the money that you receive is not yet taxed. So, when it is tax season, you have to pay in full.
Instead of receiving miscellaneous or dividend income, you’re receiving periodic interest payments, which are taxable. So, you’ll still have to report it to the government. Regularly, financial institutions will send you a form so you can use it to file taxes for the year. You’ll 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.
What is a 1099 INT tax form?
As mentioned previously 1099 INT Form is used to report interest income. If you receive at least $10 of interest during the calendar year from an individual, bank, or other entity. Then you’re required to complete a 1099 INT Form. Additionally, the form is issued by all payers of interest income to investors at year ends. This includes a breakdown of all types of interest income and related expenses.
Hers’s a breakdown of the most important facts about a 1099 INT:
- All payers of interest income must issue a 1099 INT to investors at year-end and include all types of interest income and related expenses.
- Brokerage firms, banks, mutual funds, and other financial institutions must file 1099 INT on interest over $10 paid during the year.
- Form 1099 INT must be sent to the IRS and each interest recipient no later than February 1st, 2021.
1099 INT Form left side boxes
The left side boxes of the Form 1099 INT consist of personal information. This includes information about paying entity as well as the payer’s personal information. Paying entity information includes name, address, and taxpayer identification number. Include the payee account number along with checkboxes. This is to indicate if the financial institution thinks that the payee account falls under the Foreign Account Tax Compliance Act requirements. Or else if the payee might have provided an erroneous tax identification number in the past.
Federal 1099 INT Form right side boxes
The right sides of the boxes of the 1099 INT Form include information about the type of interest paid in the previous year. This includes:
Box 1 indicates any taxable interest income you’ve received from the payer that doesn’t qualify for inclusion in box 3.
Early withdrawal penalty
If you took a withdrawal from a bank CD before it matured, you typically have to pay a penalty. The amount you paid will show up in box 2.
Interest on US saving bonds and treasury obligations
Box 3 includes all interest from obligations of the U.S. government, including treasuries and saving bonds.
Federal income tax withheld
Any federal income tax that your bank or broker withheld will show up in box 4.
If there are deductible investment expenses that the financial institution incurred, then they’ll be listed in box 5.
Foreign tax paid and a foreign country or US possession
If the interest came from a foreign jurisdiction, then you might have to pay tax to that country. The amount of the tax and the name of the country will be in boxes 6 and box 7.
Tax-exempt and specified private activity bond interest
Box 8 includes all interest from tax-exempt issuers including states, municipalities, and U.S. possessions. Certain municipal bonds that have a specified private activity are taxable for alternative minimum tax purposes. Interest from those obligations appears in box 9.
For certain bonds that you bought less than face value, you’re required to include a portion of the discount each year as taxable interest. This amount appears in box 10.
If you paid more than face value for a bond, then you’re typically allowed to amortize a portion of the premium you paid each year. This amount is listed in box 11 for corporate bonds. Include treasuries amount in box 12. Box 13 has tax-exempt bond premium amounts.
Tax-exempt and tax credit bond
Box 14 will have the identifying number of the interest listed on the 1099 INT Form for a single bond. For multiple bonds of the same payer, you can expect to see the word various here.
State tax information
You’ll find state tax information in boxes 15 to 17, including any state tax withheld. Some interest gets taxed differently for state purposes. So be aware of that when completing a state income tax return.
Who to file a 1099 INT tax form?
If you’re curious, check out the given circumstances to file 1099 INT for each person:
- To whom you paid amounts reportable in boxes 1, 3, and 8 pf at least $10 or at least $600 of interest paid in the course of trade or business.
- For whom you withheld and paid any foreign tax on interest.
- From whom you withheld and didn’t refund any federal income tax under backup withholding rules.
What to do with 1099 INT form information?
When your financial institutions didn’t withhold any taxes on the interest you gained, you have to pay that amount in full. If you’re filling it out, be sure to take note of the following items. That you’ll need to record on your tax return:
- Legal name;
- Taxpayer identification number;
- The total amount you paid them during the tax year;
You will have to complete this for every financial institution that you receive interest from. Be sure to verify with your account that you have earned that much before submitting it to the IRS.
Now that you know a quick guide to filing a 1099 INT tax form. You can be prepared and less stressed when tax season rolls around each year! Another tip to be prepared is to keep records of everything you need in a filing cabinet. We provide you service to file your 1099 INT Forms electronically through Form 1099 Online. Feel secure and comfortable when filing through our IRS-certified e-file provider.