No 1099- interest too small?

[harley]

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.

And after it goes through committee and voting, and ends up 835 pages long with money for bridges to nowhere and studies of seahorse mating habits that will definitely simplify things. IMO "passing a law" seldom makes things better.

 

[Koolau]

And after it goes through committee and voting, and ends up 835 pages long with money for bridges to nowhere and studies of seahorse mating habits that will definitely simplify things. IMO "passing a law" seldom makes things better.

I'm sure people would consider me cynical about gummint but I call it being resigned. YMMV

 

[SecondCor521]

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.

Yes, most of the time it won't matter. Sometimes the extra $5 will push someone into the next $50 "bracket" if their income was $41,099 or something like that.

Surprisingly, the correct thing to do is to use the tax tables in the instructions if one's income is less than $100K, or use the formula if above that range. So even though one might think it more exact to do the actual bracket math, if you're under the $100K number that's not really correct - you're supposed to go to the tables. Doesn't really make more than a few dollars worth of difference, and in the long run it'll average out.

I'm starting to come around on the last point, although I do report the few dollars of interest received even if no 1099-INT. Doesn't take too long, and I only have a few bank accounts to check.

 

[scrabbler1]

Yes, most of the time it won't matter. Sometimes the extra $5 will push someone into the next $50 "bracket" if their income was $41,099 or something like that.

Surprisingly, the correct thing to do is to use the tax tables in the instructions if one's income is less than $100K, or use the formula if above that range. So even though one might think it more exact to do the actual bracket math, if you're under the $100K number that's not really correct - you're supposed to go to the tables. Doesn't really make more than a few dollars worth of difference, and in the long run it'll average out.

I'm starting to come around on the last point, although I do report the few dollars of interest received even if no 1099-INT. Doesn't take too long, and I only have a few bank accounts to check.

I remember at one time we had a choice as to whether to use the tax brackets or the tax tables, whichever was less. Maybe it was the state forms, maybe the federal forms, I forget. But at some point in the 1990s, they told us to use the tables (for lower incomes) no matter what. I think it was late 1990s because I had to change the programming in my tax form skeleton spreadsheet to mimic the tables instead of the brackets.

 

[Al in Ohio]

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?

I never expect a 1099 if it’s less than $10. It’s a common occurrence for most banking institutions. Just report the amount without a 1099.