1099-INT but no income?

[dorkiedoode]

hello, last September i turned 18 and started applying for CC and bank accounts. Doing so i should be getting 150 from chase, 200 from citibank, schwab interest and ING interest. i have no income but do i still have to pay taxes?

EDITED:
sorry guys for not being clear. i did not get 1099-int from chase or citibank but i heard they get taxed so i assumed i will be getting 1099-int. they are *rewards* or sign-up bonus for applying.

but i did received a 1099-int for ING for 25 dollars in interest and 4 dollars in interest for schwab.

[nospendthrift]

1099 Int

All worldwide income is reportable. Financial institutions will issue 1099 INT when the interest paid is over $10. There are some other things to consider, and that is what the investment income amounts to, determining if you need to file. I would suggest talking with a good tax preparer - ask around to get advice on where to go.

[safari]

If you're single, you need to file if your gross income was at least $8,750. However, in many cases it's beneficial to file, even when your income was below that number because you might qualify for earned income credit. In your case I don't think you will qualify for it because you don't have any earned income, only interest.

[Joan.of.the.Arch]

$150 from Chase and $200 from Citi--are those interest payments or credit card "rewards?" I think rewards are not new income but just a rebate--your own money being returned. But I sure would like to hear from someone more knowledgeable on that.

[disneysteve]

$150 from Chase and $200 from Citi--are those interest payments or credit card "rewards?" I think rewards are not new income but just a rebate--your own money being returned. But I sure would like to hear from someone more knowledgeable on that.

That's correct, Joan. CC rewards aren't taxable, but they also wouldn't generate a 1099, so this must be interest that the OP is referring to.

[Aleta]

If she had no income except the interest. I think that you have to make at least a certain amount before you file a return. As safari said, there could exceptions. Plus, you also have your personal deductible and standard or itemized. I can't see her getting any money back if she actually didn't earn any income. Interest income is passive income and you don't pay social security taxes on that.

[dardhel]

It is always important to fill out tax forms and if you don't owe and aren't getting a refund then just file it in case you get an audit later. But is definitely good to cover your butt...

[dorkiedoode]

sorry guys for not being clear. i did not get 1099-int from chase or citibank but i heard they get taxed so i assumed i will be getting 1099-int. they are *rewards* or sign-up bonus for applying.

but i did received a 1099-int for ING for 25 dollars in interest and 4 dollars in interest for schwab.

[Like2Plan]

dorkiedoode,
Were the 150 from chase, 200 from citibank bonuses for opening checking/savings accounts?
DS received $$ for opening accounts and they were reported as interest on 1099's.

Are you being claimed as a dependent on your parents taxes? If so, your threshold is as follows:

Link to IRS web site
Single dependents
"You must file a return if any of the following apply.

1. Your unearned income was more than $850.
2. Your earned income was more than $5,350.
3. Your gross income was more than the larger of —
1. $850, or
2. Your earned income (up to $5,050) plus $300."

[poundwise]

For clarification:

'Rewards' such as cash-back rebates acquired through use of a rewards credit card are considered a reduction in the purchase price of goods and/or services and are not taxable.

"The IRS realistically views rebates as another way of offering a price reduction to induce you to buy a product. ... The same rule applies to any cash rebates you might receive from your credit card company for using its card."
(Source: Ernst & Young Tax Guide 2007)


'Bonuses' such as paid by a bank, broker, or other financial institution for signing up for a new account or for referrals are considered the same as interest earnings and, as such, are taxable. This is true whether the bonus was paid as cash or as a gift card, etc.

"The $25 bonus... is considered taxable income and will be reported on IRS Form 1099."
(Source: HSBC)

"The amount of any bonus payment will be reported to the IRS as interest earned in the year credited."
(Source: Citibank)

[dorkiedoode]

dorkiedoode,
Were the 150 from chase, 200 from citibank bonuses for opening checking/savings accounts?
DS received $$ for opening accounts and they were reported as interest on 1099's.

Are you being claimed as a dependent on your parents taxes? If so, your threshold is as follows:

Link to IRS web site
Single dependents
"You must file a return if any of the following apply.

1. Your unearned income was more than $850.
2. Your earned income was more than $5,350.
3. Your gross income was more than the larger of —
1. $850, or
2. Your earned income (up to $5,050) plus $300."

i guess i don't have to file a claim then since i am a single dependent and have 0 income with an unearned income that was no more than 850?

[poundwise]

i guess i don't have to file a claim then since i am a single dependent and have 0 income with an unearned income was no more than 850?

No. It doesn't sound like you have any filing requirement.

Here is another, similar, reference to the one provided above -- H&R Block, Do You Have to File...?

[dorkiedoode]

thank you everyone!!