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Old 04-07-2014, 11:10 AM
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Question Very Small Interest Payment From Bank

I have a very small interest amount from a bank, less than $3.00. I had not received a form 1099, and when I contacted the bank, they informed me that they do not report interest income less than $10.00, but they did confirm that the small amount I quoted to them was correct.

My question(s):
Is it an IRS regulation that small interest payments like this (<$10) do not have to be reported on taxpayer returns?
Since the bank is not sending a form 1099 to anyone, should I just let sleeping dogs lie and not add it to my tax return? My concern is not in paying the tax, it has more to do with the IRS computers getting confused because I report the income that is not matched by a 1099 in their system, but normally would be. I'm inclined to just go ahead and report it, overall.

Any advice?



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Old 04-07-2014, 11:38 AM
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Quote:
Originally Posted by TXDM View Post
I have a very small interest amount from a bank, less than $3.00. I had not received a form 1099, and when I contacted the bank, they informed me that they do not report interest income less than $10.00, but they did confirm that the small amount I quoted to them was correct.

My question(s):
Is it an IRS regulation that small interest payments like this (<$10) do not have to be reported on taxpayer returns?
Since the bank is not sending a form 1099 to anyone, should I just let sleeping dogs lie and not add it to my tax return? My concern is not in paying the tax, it has more to do with the IRS computers getting confused because I report the income that is not matched by a 1099 in their system, but normally would be. I'm inclined to just go ahead and report it, overall.

Any advice?

I have a very small interest amount from a bank, less than $3.00. I had not received a form 1099, and when I contacted the bank, they informed me that they do not report interest income less than $10.00, but they did confirm that the small amount I quoted to them was correct.==============>>>>>>>>>>>>>correct; even if you do not receive Form 1099-INT, you still needto report all of your taxable interest income. It does not say that interest of less than $10 isn't reportable.

My question(s):
Is it an IRS regulation that small interest payments like this (<$10) do not have to be reported on taxpayer returns?=====>>>>>>>>>>>no I donot think so;as mentioned above, some financial institutions find it administratively more efficient to run all of the reports, regardless of the amount. Some banks that hold clients’ savings accounts issue a 1099-INT for each of the accounts every year despite the fact that the interest is only a few dollars.

Since the bank is not sending a form 1099 to anyone, should I just let sleeping dogs lie and not add it to my tax return? My concern is not in paying the tax, it has more to do with the IRS computers getting confused because I report the income that is not matched by a 1099 in their system, but normally would be. I'm inclined to just go ahead and report it, overall.========>>>>>>>>>> just because you don't get a 1099-INT does not mean that the IRS wasn't notified of the amount. Truth is, they were, but the bank decided to save a few trees and a few hundred thousand dollars in postage by not sending out the ones that were not required by law. The reporting to the IRS is done electronically and the cost per item is less than a penny vs several dollars to print, stuff, and mail a single paper form. The $10 threshold is supposed to be for the sake of administrative ease. The tax associated with interest of $10 or less is so insignificant that reporting this interest is not required by the bank.



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