No 1099- interest too small?

[CardsFan]

I never got a 1099-INT from the local B&M bank, so I sent a message. Answer was " you only had $3.77 in interest, and we don't issue a 1099-INT for less that $10".

So... sounds like I do not report it, as they did not.

I know it is [-]peanuts[/-] pennies, but I just want to do it right.

Comments?

 

[Onward]

Under $10, they don't have to issue you a 1099.

Legally you are still required to report the interest received, however.

 

[gauss]

Under $10, they don't have to issue you a 1099.

Legally you are still required to report the interest received, however.

+1

The bank is not required to issue a 1099-INT for interest less than $10.
Legally, you are required to report all taxable income reported and non-reported.

 

[CardsFan]

Thanks. Guess I will just put it in there and pay the $0.25 that I owe.

 

[Ready]

I earned 1 cent of interest from PenFed last year. They never mailed my 1099 but I still added it to my return. Why risk getting flagged for a missing entry over a penny?

 

[pb4uski]

+1

The bank is not required to issue a 1099-INT for interest less than $10.
Legally, you are required to report all taxable income reported and non-reported.

+2 I had $7.67 from 3 different banks that I reported on Schedule B that I did not receive a 1099-INT. It cost me anothe $2 in taxes.

 

[OldShooter]

Schwab sent me a 1099 for nine cents. Rounds to zero = tax-free income

 

[CardsFan]

OP here.

No problem reporting, but the bigger question is "If I did not get a 1099, why would I even think to report it?"

Oh well. I had already put a "place saver" of $5 in TT. No big deal.

 

[Plantman]

My question is if the bank doesn't report it, how does the IRS know you earned it?

 

[Aerides]

OP here.

No problem reporting, but the bigger question is "If I did not get a 1099, why would I even think to report it?"

Oh well. I had already put a "place saver" of $5 in TT. No big deal.

iirc most tax forms will have an entry for it, not dependent on a 1099. Similarly, small businesses that sell on places like ebay/etsy/amazon will not get a 1099 if they have under certain sales thresholds, but taxes still apply.

 

[pb4uski]

OP here.

No problem reporting, but the bigger question is "If I did not get a 1099, why would I even think to report it?"

Oh well. I had already put a "place saver" of $5 in TT. No big deal.

I just look at Quicken and interest for 2020 by bank.

 

[pb4uski]

My question is if the bank doesn't report it, how does the IRS know you earned it?

They don't.

 

[scrabbler1]

I never have, and that includes when I have done income taxes for my (snake-bit) friend.

 

[audreyh1]

Under $10, they don't have to issue you a 1099.

Legally you are still required to report the interest received, however.

Right. I do. The Dec statement usually has interest paid for the entire year.

 

[rk911]

I never got a 1099-INT from the local B&M bank, so I sent a message. Answer was " you only had $3.77 in interest, and we don't issue a 1099-INT for less that $10".

So... sounds like I do not report it, as they did not.

I know it is [-]peanuts[/-] pennies, but I just want to do it right.

Comments?

most financial institutions do not issue a 1099 for amounts less than $10. 'tis between you and your conscience in terms of declaring it.

 

[Montecfo]

I report it. That's how the system is designed to work.

 

[rk911]

I report it. That's how the system is designed to work.

good for you. so would we.

 

[scrabbler1]

Keep in mind that an amount under $10 may appear on a 1099-DIV if a form is issued for another reason, such as another type of distribution(s) shown on it exceeds $10. I received one a few days ago which showed for a tax-exempt muni bond fund an ordinary dividend (short-term cap gain distribution) of $4 while there were tax-exempt dividends/interest and long-=term cap gain distributions much greater than $10.

 

[Koolau]

OP here.

No problem reporting, but the bigger question is "If I did not get a 1099, why would I even think to report it?"

Oh well. I had already put a "place saver" of $5 in TT. No big deal.

Yeah, when I pull out all the tax stuff to send to the CPA, I might not notice the lack of a 1099 for a small, non productive account. I get statements from my CU but rarely get more than a few cents per month. I guess the last statement of the year would contain the interest amount for the year, but I've come to depend on receiving the 1099. Guess I should be more diligent. Even for a couple dollars, I don't want to run afoul of the IRS though YMMV.

 

[pb4uski]

My guess is that most taxpayers use tax tables based on their taxable income rather than tax brackets so an additional $10 of interest isn't going to change the tax due in many situations because the tax tables are increments of $50... so for most taxpayers some underreported interest isn't going to change their tax.

If I use the what-if worksheet and add $10 or $20 to income then my tax doesn't change so TT seems to be using the tax tables in some situations.

Don't sweat the small stuff.

 

[RE2Boys]

Yeah, when I pull out all the tax stuff to send to the CPA, I might not notice the lack of a 1099 for a small, non productive account. I get statements from my CU but rarely get more than a few cents per month. I guess the last statement of the year would contain the interest amount for the year, but I've come to depend on receiving the 1099. Guess I should be more diligent. Even for a couple dollars, I don't want to run afoul of the IRS though YMMV.

I sent 12 years working the back office at a CPA firm doing taxes. Even though the firm provided each client with an organizer that showed what was reported the previous year, I would very often need to go back to the client asking for missing information, often a 1099 INT. Account closed? Less that $10 in interest? Or hundreds of earned interest. Without a note or 1099, I had no idea concerning the account. And every minute I spent on that return was tracked against the client. At the firm I worked at, the CPA bill was primarily based on the time spent preparing the return. And folks wonder why their CPA charges so much. It was an unusual joy to receive an envelope and find all required forms included, notes if accounts closed, changes in the clients financial situation noted, etc. I could preform all data entry, QC the return and hove it off my desk in one sitting and minimized the billing to the client. Very rarely happened.

The IRS won't bother with a missing 10 or 20 dollars of interest, But your CPA will and may charge extra for the service If you can't be bothered with keeping track of your accounts! Of course, DIY folks won't have the latter issue.

 

[harley]

If I don't get a 1099 I don't bother to report it. I also don't report the pennies or occasional dollars I find on the ground, which tends to come out to larger totals than my interest these days.

 

[rk911]

OP here.

No problem reporting, but the bigger question is "If I did not get a 1099, why would I even think to report it?" ...

you might not but speaking for myself each year I run a series of Quicken reports for tax prep one of which is 'Accrued Interest'. it shows any accrued interest during the year no matter how little.

I don't know if the IRS is aware of these small amounts...without a 1099 I don't see how they could be aware...but, for me anyway, that's not the point.

 

[Gumby]

I almost always have less than $10 interest from my checking account and do not receive a Form 1099-INT from my bank. But I always report the $8.28 or whatever that I receive because: A) it's the law and B) it's the right thing to do. Whether the IRS will catch me does not enter into that calculation.

 

[Sunset]

Congress should pass a law that if you have less than 5 accounts and some of them earn less than $5 in interest, you don't report it and it's not taxable.

They could call it the 5-5 law.

Save the peon's some work/effort and simplify the tax process.