I was told that we do not need to pay interests for accounts in domestic banks. Not sure about it.
2007-07-29 20:11:59 · 8 answers · asked by Andy 1 in Business & Finance ➔ Taxes ➔ United States
Interest from savings is fully taxable regardless of what bank pays it. There is no exemption for Citibank or any other bank. Whoever told you that interest from domestic banks is exempt doesn't know what they're talking about.
And it doesn't matter how much you receive. The $10 referred to by another poster refers to the bank's requirement to send you a Form 1099-INT. Even if the interest is less than $10 it still must be reported.
2007-07-29 21:49:47 · answer #1 · answered by Bostonian In MO 7 · 2⤊ 1⤋
wrong. If you earn interest income from bank accounts and the interest earned is >$10, you should get a 1099-Int from the bank and you will have to report that income on your tax return. Some states do give you a partial exemption on bank interest though, Massachusetts exempts up to $100 for a single person and $200 for a married couple for interest earned from Massachusetts Banks.
2007-07-30 10:32:16 · answer #2 · answered by Anonymous · 1⤊ 0⤋
Absolutely. The bank will furnish you with a 1099 showing interest income from that particular tax year. In small print on that form you will see a paragraph that says:
This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this income is taxable and the IRS determines that it has not been reported.
Don't neglect to pay up!
2007-07-30 03:31:48 · answer #3 · answered by boggle10 6 · 2⤊ 1⤋
Anything other than a 401K or an IRA is subject to taxes on earnings. If you have interest bearing accounts the account holder is obligated to send you a statement of earnings or a 1099 that you use in filing your taxes to show the income related to that account.
2007-07-30 10:39:23 · answer #4 · answered by jwsou812 3 · 1⤊ 0⤋
All interest is taxable unless it is from tax exempt sources (like municipal bonds) even if it is less than $10.00
Banks have to issue 1099 INT if it is $10.00 or more.
2007-07-30 03:51:02 · answer #5 · answered by Mark S 5 · 3⤊ 1⤋
If you earn $10 or more from a bank, it's taxable, unless it's a tax-sheltered account like an IRA. Whoever told you otherwise is lying or misinformed.
2007-07-30 03:18:41 · answer #6 · answered by Houyhnhnm 6 · 0⤊ 4⤋
I don't know in the US, but in my country we pay tax after a certain free amount of interest. We are paying already income-tax and now also interest-tax...........
2007-07-30 03:21:16 · answer #7 · answered by Anonymous · 0⤊ 3⤋
You were told wrong. The interest is taxable.
2007-07-30 13:05:42 · answer #8 · answered by Judy 7 · 1⤊ 1⤋