Sometime in February, you might have received a 1099-INT tax form (or more than one) in the mail. Whenever you get one of these, you should hang on to it, because it can have a big impact on your tax life. Here's how Form 1099-INT works.
What is a 1099-INT?
A 1099-INT tax form is a record that a person or entity paid you interest during the tax year. If you earned $10 or more in interest from a bank, brokerage or other financial institution, you’ll receive a 1099-INT.
Simply receiving this tax form doesn’t necessarily mean you owe taxes on that money. You might have tax deductions that offset the income, for example, or some or all of it might be sheltered based on characteristics of the asset that generated it. In any case, remember: The IRS knows about it.
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What to do with a 1099-INT tax form
You use your IRS Form 1099-INT to help figure out how much income you received during the year and what kind of income it was. You’ll report that income in different places on your tax return, depending on what kind of income it was.
If you need help estimating how interest income on a Form 1099-INT could affect your tax bill, check out our free tax calculator.
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What does my 1099-INT form mean?
If you received this tax form from a bank or other entity because you have investments or accounts that earned interest, you might also get a few other 1099 tax forms in the mail.
1099-DIV
The 1099-DIV reports dividends you received. This doesn’t include dividends on your share account at the credit union. The IRS considers those interest, so they appear on the 1099-INT.
1099-OID
You might receive Form 1099-OID if you bought bonds, notes or other financial instruments at a discount to the face value or redemption value at maturity. Typically, the instrument must have a maturity of more than one year.
1099-R
If you got distributions from a pension, retirement plan, profit-sharing program, an IRA or an annuity, you might receive a 1099-R. (Remember, many retirement plans are tax-advantaged, so this form might be simple record-keeping on behalf of the IRS.) If you took a loan from your retirement plan, you might have to treat it as a distribution, which means it might be on this form, too, as well as permanent and total disability payments under life insurance contracts.
