In our last section of the 1099 series I took a look at the 1099-DIV. I stated that this 1099 was one of the most common 1099’s that are issued each year. 1099-INT for the most part, is one of the most common 1099’s forms that taxpayers will see each year. This form is great because it is relatively straight forward in how it is issued and calculated.
What is a 1099-INT?
1099-INT, or the 1099 form for interest income, is a form that states what the interest income for the year was for a particular recipient. In the previous paragraph I stated that is a relatively common form. This is because the minimum amount that is required to have one issue to you is soo low. For a 1099-INT, this is only $10 of interest income. Most of the time, these forms are issued by either a tax payers bank, a taxpayer’s brokerage house, or by people who have paid interest to a taxpayer via a personal or business loan.
How does this form affect my taxes?
First thing, first, this form does have to go to someone. This means that this form will have the recipient’s, and the payor’s names, addresses, and tax identification numbers. Then after that the interest that you earned will be in box 1. For most people this will be the only box that will be filled in on the majority of 1099-INT. This number will go onto your 1040, on line 2. If you have over $1,500 of interest you will actually put this number on Schedule B and the result of your interest in Schedule B will go onto line 2 on your 1040.
Beside box 1 there are 17 boxes on the form. Some of the most common items that will be on 1099-INT include foreign taxes (box 6), income tax withheld (box 4 for federal and box 17 for state), tax exempt interest (box 8), investment interest expense (box 5), bond premiums (box 11 and box 13 for tax exempt bond premiums). In addition to these there are boxes for state items, early withdrawal penalties (not very common at all), and interest from foreign entities. This isn’t all of the items on 1099-INT, but these are the most common ones.
Conclusion
In conclusion the 1099-INT is one of those rare IRS forms that are very straight forward. The main component is in the name of the form, which is interest. This interest goes on form 1040 as interest income. However this interest could require a tax payer to fill out a Schedule B, but this is uncommon. A qualified accountant, like CPA Solutions can help tax payers fill out this form quickly and efficiently.