Reporting interest income for taxes

[jodi]

Does anyone know if you are required to report every bit of interest income, or is there a threshhold? I received $.04 from one account, and about $1 from another - but didn't receive a 1099-INT from either bank. I don't mind reporting them - it's not going to amount to much, obviously, but I don't want to give myself any more work than I have to, esp. since I don't have a 1099-INT and will have to research the exact amounts.

Thanks!

[MonkeyMama]

If you don't report it, eh. No one's going to care. IT won't change your tax. I think it would fall under the rule of "immateriality."

I say that as a CPA.

Likewise, if you want to put $1 on there, eh. Probably what I would do, but I am extremely cautious. Not like it will truly make a difference.

I certainly wouldn't waste my time looking it up.

I just had to add that there is no threshhold, every dime needs to be reported, technically. But, it's an odds game. If it doesn't affect your taxes, why would you waste your time? IT's more of a logic thing than an IRS rule.

[jodi]

Thanks! That's kinda what I was thinking anyway. I figure if the bank considers it too small to send me a statement, it's probably too small to bother reporting (esp. since it doesn't even affect the tax I will owe).

But, of course, I am making this decision fully informed and do not hold you responsible, as my "virtual reality" CPA, if the government decides to come after me for not reporting $1.

[MonkeyMama]

LOL. Thanks. I wouldn't say it in a public forum without 1000% certainty. That's some easy advice to stand behind.

[tabbycat31]

they're not required to report interest below $10. However many places round to whole dollars for tax purposes. so the 4 cents of interest will be rounded down to nothing.

[backtaxpro]

Agreed. Every single income stream you have has to be reported but again the IRS is not going to come after you for minimal amounts because it will cost them more to do that than they would recover.

[disneysteve]

I figure if the bank considers it too small to send me a statement, it's probably too small to bother reporting

I agree with what others have said but I'll disagree with this. Just because you didn't get a 1099 doesn't mean the amount isn't significant. Sure, the 4 cents is a waste of time to report as it rounds to zero. But what if you had an $8 or $9 dividend check from several different companies. You still wouldn't get a 1099 but now you might be talking about $40 or $50 or more. That is enough to influence the tax owed.