If in case you receive an amount which is supposed to be more than $10 as interest from a bank account you own, then you would receive form 1099-INT and you are expected to document the same while you file your tax returns.
Requirements For Filling 1099-INT
The information you receive when you get 1099-INT has to be mentioned while you file your returns, there is no need for sending the 1099-INT form received by the individual. The reason you need not send the copy is the financial institution or the bank which gives you the form 1099-INT, for the interests earned more than $10, has to report the same information along with the copy of the form with the IRS. They do it usually before January 31st and report the same to IRS by the said date. Being informed about it from the banks, IRS keeps track of the information from 1099-INT and verifies with the figures filed by an individual, who files his tax return.
The Reason For Filling Form 1099 INT
Whenever you receive a 1099-INT, a tax form which is meant to report about the sums accrued as part of interest, doesn’t mean that you have to pay income tax on the sum you received as interest. But, you are still required to report the same while you return your taxes.
The bank is supposed to send you Form 1099INT whenever it pays you an interest of more than $10; the bank also sends the report to the Internal Revenue Services. Doing so the bank keeps the Internal Revenue Service informed about the interest earned by you. You are entitled to report the same to the Internal Revenue service which verifies with the information provided by the bank. This way Internal Revenue Service is well informed about the interests earned by you. If in case there is a discrepancy in the terms of the interest earned by you and the tax returns filed by you, then the service will question you the reasons for not informing.
Most of the payments accrued from the interest needs to be reported to the Internal Revenue Service’s using the form 1099INT either by an individual or by an entity which makes the payments. The entity is most commonly a bank, other financial institution or a government agency in some cases. Although you would not pay any amount for the interests you earn on your bank accounts, still on receiving the 1099INT you have to report it while you file your taxes.