What Form 1099-INT (2019) Is For
IRS Form 1099-INT (2019) reports interest income received from banks, credit unions, or other financial institutions during the 2019 tax year. The Internal Revenue Service uses it to verify that interest payments are reported adequately on each person’s federal income tax return. It ensures both the payer and the taxpayer record identical amounts of income.
Individuals typically receive Form 1099-INT if they earned at least $10 in interest from savings accounts, certificates of deposit (CDs), savings bonds, Treasury securities, or municipal bonds. Even if the amount is less than $10, the income is still taxable and must be reported for tax purposes. The form itemizes taxable interest, tax-exempt interest, and other details that determine how interest is taxed at the federal and state levels.
When You’d Use Form 1099-INT (2019)
A taxpayer uses Form 1099-INT to report interest income received during the 2019 tax year on a federal income tax return. The Internal Revenue Service requires every payer, such as a bank or credit union, to issue the form by January 31, 2020, for all eligible accounts. Anyone who earned at least $10 in interest from savings accounts, CDs, savings bonds, or municipal bonds should expect to receive one.
If a person files a tax return and later discovers unreported interest payments, an amended return using Form 1040-X is required. A corrected 1099-INT may also be issued if a payer reports inaccurate amounts. Filing promptly helps reduce late payment penalties and interest charges, while ensuring all income tax reporting is accurate and complete.
Key Rules or Details for 2019
The $10 reporting threshold determines whether a payer must send Form 1099-INT, but all taxable interest must still be included on the income tax return. If total interest exceeds $1,500, the taxpayer must attach Schedule B to list each payer and the amount. Interest from U.S. Treasury bonds is subject to federal income tax but exempt from state tax, while tax-exempt interest from municipal bonds must still be reported for informational purposes.
Early withdrawal penalties from CDs are deductible and reduce adjusted gross income even if a person does not itemize deductions. Backup withholding may apply if a taxpayer fails to provide a correct taxpayer identification number. Any withheld tax appears on the form and can be claimed as a credit on the federal tax return when the filer pays taxes for the year.
For complete details on reporting, withholdings, and tax filings, see our guide for Information Returns & Reporting Forms.
Step-by-Step (High Level)
Step 1: Gather all forms
Ensure every Form 1099-INT from each payer is received. These may come from banks, credit unions, or online savings accounts. Verify that no account was overlooked.
Step 2: Review each form
Check names, addresses, and Social Security numbers for accuracy. Compare the interest amounts to personal records. Confirm that Boxes 1, 3, and 8 correctly reflect taxable, Treasury, and tax-exempt interest.
Step 3: Calculate total interest income
Add up all taxable interest amounts from Box 1. Include interest from Treasury obligations, but exclude tax-exempt interest; if the total exceeds $1,500, complete Schedule B before filing the federal income tax return.
Step 4: Report the income
Enter taxable interest on Line 2b and tax-exempt interest on Line 2a of Form 1040. Include any withholding amounts as credits: report early withdrawal penalties and other adjustments where applicable.
Step 5: Keep records
Store all forms, statements, and receipts for at least three years in case the Internal Revenue Service requests verification or documentation of reported interest income.
Common Mistakes and How to Avoid Them
Taxpayers often make errors when reporting interest income, which can result in IRS notices or incorrect tax calculations. Common issues include:
- Failing to report small amounts of interest: All interest income is taxable, even if it’s less than $10 or no Form 1099-INT was issued.
- Using incorrect or mismatched Social Security numbers: Ensure account information matches government records to avoid backup withholding and IRS correspondence.
- Overlooking early withdrawal penalties: Penalties from certificates of deposit should be reported and may reduce taxable interest income. If you have questions about removing IRS penalties and interest, seek guidance to ensure proper documentation and filing.
- Ignoring backup withholding credits: Include withheld amounts as credits when filing your return to ensure accurate tax calculations.
- Missing electronic filing requirements: Payers that issue 250 or more forms must file electronically in accordance with IRS rules.
Reviewing account details, verifying identification information, and understanding reporting categories help taxpayers avoid penalties and ensure compliance with tax regulations.
What Happens After You File
After a tax return is filed, the Internal Revenue Service matches reported amounts against data submitted by payers. If differences appear, the agency issues a CP2000 notice proposing adjustments to the return. The notice allows the taxpayer to agree with the changes or provide documentation supporting the original filing.
If everything matches, processing continues normally. Any refund due is issued once the return is verified. Taxpayers who reported backup withholding or early withdrawal penalties will see these adjustments automatically applied to their tax liability.
FAQs
What is IRS Form 1099-INT (2019), and who needs to file it?
IRS Form 1099-INT (2019) reports interest income a person earned from banks, savings accounts, CDs, or savings bonds. The Internal Revenue Service requires every payer to issue this form for taxable interest and other income that must be included on a federal income tax return.
How do taxable interest and tax-exempt interest differ?
Taxable interest is subject to federal income tax and must be reported on the income tax return. Tax-exempt interest, such as income from municipal bonds or certain state-issued bonds, is not taxed; however, it should still be reported on the federal tax return for accurate reporting.
When should a taxpayer receive Form 1099-INT from a bank or payer?
A bank or financial institution must send Form 1099-INT by the end of January for the previous tax year. The form includes the payer’s information, the account number, and the total amounts received. Taxpayers use it to file their federal tax return and pay taxes owed.
What should a person do if a Form 1099-INT shows incorrect amounts or information?
If the form shows inaccurate interest payments or missing details, the taxpayer should contact the payer or bank immediately to request a corrected version. Accurate forms ensure that all earnings, proceeds, and taxable income are correctly reported to the Internal Revenue Service.
Can a tax professional help prepare Schedule B or file an amended tax return?
A qualified tax professional or attorney can prepare Schedule B, verify interest reporting, and provide guidance on filing an amended income tax return. Their services help ensure that all forms are accurate, taxes are properly paid, and the Internal Revenue Service processes refunds efficiently.
Where can I download Form 1099-INT and related instructions?
Taxpayers can visit the official IRS website to download Form 1099-INT, Schedule B, and instructions for reporting interest income. The site provides links, examples, and guidance to help every filer prepare a complete and accurate federal income tax return.
