Interest from savings accounts might not seem like much, but it matters at tax time. If you’re wondering which form you need for tax reporting, you’re not alone. Banks and credit unions send millions of forms in January, but not all of them look familiar. Let’s make sense of the paperwork and see which form you should expect—plus how to handle it when filing your taxes.
Why Interest Income Needs Reporting
Interest from a savings account is extra money—just like finding a few dollars in your jeans, but from your bank instead. The IRS considers this taxable income, which means you need to tell them about every penny you earn. Ignoring interest income can lead to penalties or unwanted attention from the IRS.
Meet Form 1099-INT: The Key to Reporting Savings Account Interest
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The form you’re looking for is Form 1099-INT, Interest Income. Financial institutions like banks or credit unions send this form if you earn $10 or more in interest during the year. Sometimes, you might get one even if you earn less, or you may not get one at all—but the tax responsibility remains.
Key facts about Form 1099-INT:
- Used by banks, brokers, and mutual funds to report interest payments.
- Sent out by January 31 each year.
- Must be included with your annual tax return.
If you have several savings accounts, expect multiple 1099-INT forms—one from each bank or institution.
What’s on Your 1099-INT Form?
Let’s break down the boxes you'll see:
- Box 1: Interest Income – The main number. This is what you earned in interest and need to report as income.
- Box 2: Early Withdrawal Penalty – Shows penalties if you took your money out of a time deposit (like a CD) early.
- Box 3: Interest on U.S. Savings Bonds or Treasury Obligations – Includes earnings from certain government bonds.
- Box 4: Federal Income Tax Withheld – If backup withholding applies, it shows here.
- Box 8: Tax-Exempt Interest – Interest that isn’t taxable federally, such as municipal bond interest.
Most people need to pay attention to Boxes 1 and 4. Keep all the forms together for tax season.
What If You Earn Less Than $10?
Banks don’t have to send a 1099-INT unless you earn at least $10. But you must report all interest income, even if it’s $1. If you don’t receive a form but see interest on your account statements, add it to your return anyway. The IRS expects you to report every dollar.
Not reporting small amounts can raise red flags, especially as banks report these figures to the IRS even below the threshold.
Where Do You Report Savings Account Interest on Your Tax Return?
Interest income from your 1099-INT lands on Form 1040, typically on line 2b. If the total interest from all sources exceeds $1,500 or you have certain special types of interest, you may need to fill out Schedule B as well.
Steps for Reporting:
- Gather all 1099-INT forms.
- Add up your total taxable interest.
- Enter the amount on your federal tax return.
- Complete Schedule B if your interest or dividend income is over $1,500 or you receive certain types of interest.
Your tax software or tax preparer will walk you through these steps if you’re unsure.
Special Cases and Other Forms
Sometimes, you might see other forms:
- Form 1099-OID: For original issue discount on bonds and similar investments.
- Form 1099-DIV: For dividends and some types of investment interest (not regular savings accounts).
- Form 1099-B: For stock or other asset sales—not interest.
If your savings account is part of a trust or retirement plan, reporting could be different. But for basic savings, 1099-INT is the form to watch.
What to Do If You Don’t Get a 1099-INT
If you expect one and it’s February with no form in your mailbox or inbox, check:
- Did you earn less than $10 interest?
- Was your address changed?
- Is the form in your bank’s online portal or email?
- Contact your bank and ask.
Even without the form, use your bank statements to tally up and report your total interest.
Tips to Avoid Mistakes with Interest Income
Keep these strategies in mind:
- Save every 1099-INT in a tax folder or digital album.
- Double-check numbers against your bank statements.
- Don’t skip small amounts—they’re taxable.
- Ask your bank about any confusing entries or penalties.
Most mistakes happen when income slips through the cracks, especially if you have accounts at more than one bank.
Conclusion
The Form 1099-INT is the official tax form for reporting interest income from savings accounts. Even if you don’t receive this form, you need to report all interest earned. Keep your paperwork organized, confirm totals, and add every dollar to your tax return. With the right form and a little preparation, handling interest income is simple and hassle-free.
Have questions about a specific situation with your savings account interest? Drop them in the comments, and let’s tackle tax time together!