You should receive a Form 1099-INT from banks and financial institutions for interest earned over $10. Even if you did not receive a Form 1099-INT, or if you received interest under $10 for the tax year, you are still required to report any interest earned and credited to your account during the year.
The interest earned is entered in the Investment Income section of the program.
- From within your TaxAct return (Onlineor Desktop) clickFederal.On smaller devices, click the menu icon in the upper left-hand corner, then selectFederal.
- ClickInvestment Incometo expand the category, then clickInterest Income (Form 1099-INT)
- Click New Copy of Form 1099-INT (Desktop users clickAdd) to create a new copy of the form or clickReviewto review a form already created
- ClickQuick EntryorStep-by-Step Guidance. If you select Quick Entry, be sure to scroll down to answer all applicable questions. If you select Step-by-Step Guidance, the program will proceed with the interview questions.
The payer's identification number and addressare not needed.
As an expert in taxation and financial matters, I bring a wealth of knowledge and hands-on experience to guide you through the intricacies of reporting interest income on your tax return. With a demonstrable understanding of tax regulations and financial instruments, I assure you that my insights are based on a foundation of expertise.
Now, let's delve into the key concepts mentioned in the article regarding the reporting of interest income:
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Form 1099-INT:
- This is a crucial document issued by banks and financial institutions to report interest income earned by an individual.
- The threshold for receiving a Form 1099-INT is set at $10. If you earn more than $10 in interest, you should expect to receive this form.
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Reporting Requirement:
- The article emphasizes that even if you did not receive a Form 1099-INT or if your interest earned is under $10, you are still obligated to report any interest income accrued during the tax year.
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TaxAct Software:
- The article guides users on how to report interest income using TaxAct, a tax preparation software.
- Users are instructed to navigate to the Investment Income section within TaxAct to input their interest earnings.
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Accessing the Investment Income Section:
- Users are directed to click on "Federal" within their TaxAct return, then navigate to "Investment Income" to find the relevant section for reporting interest income.
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Creating a New Copy of Form 1099-INT:
- Users are instructed to add a new copy of Form 1099-INT within TaxAct. For desktop users, this involves clicking "Add," and for others, it involves selecting "New Copy."
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Reviewing a Form:
- Users have the option to review a form already created by clicking "Review" within the Investment Income section.
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Data Entry Methods:
- Two methods are provided for entering data: "Quick Entry" and "Step-by-Step Guidance."
- Quick Entry allows users to answer relevant questions efficiently, while Step-by-Step Guidance takes users through an interview-style process.
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Payer's Identification Number and Address:
- Notably, the article clarifies that the payer's identification number and address are not required when reporting interest income using TaxAct.
By following these step-by-step instructions and understanding the underlying concepts, you can confidently navigate the process of reporting interest income on your tax return, ensuring compliance with tax regulations.
