is bank interest considered accrued or regular for tax purposes?

Answer 1

Interest that you could withdraw without "substantial penalty" is taxable whether you withdraw it or not. This includes interest on certificates of deposit, where the interest may be credited to your account periodically such as monthly.

This type of bank interest is taxed as it accrues. You cannot defer taxes on it by choosing not to withdraw it.

Answer 2

For tax purposes, interest as represented by a 1099-INT, is considered taxable when earned and payable. So if you have it compounded, you declare and pay on what was accrued, and payment is not necessary
On the other hand, simple interest is payable on the last day of the earning period,,which is also the pay day on that amount. It is due and payable as well as taxable on the last day.

Answer 3

The 1099-Int is for interest paid during that year. If the taxpayer is on a cash basis for tax purposes, the interest must be reported as income for that year.

Answer 4

Accrued interest hasn't been paid yet, so isn't taxable until paid on the account.