I have a 6-month CD going from 08/23/2007 to 02/23/2008. I was wondering if I have to report the interest earned as of 12/31/2007 when I file my taxes for year 2007 or CD has to come to an end, which is 02/23/2008 and then report the whole CD earned interest for income year 2008. Please help?
2007-09-17 09:29:35 · 5 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
Interest in a bank CD is taxed as it is accrued. You do not have the option of not paying reporting or paying tax on your interest until the CD matures.
The bank will send you a 1099INT for interest that has been credited to your account as of 12/31/2007. The interest earned early in 2008 will be taxed in 2008.
2007-09-17 15:04:00 · answer #1 · answered by ninasgramma 7 · 0⤊ 0⤋
You bank will send you a 1099 INT for the interest accrued through 12/31/07. It is constructively received in 07.
2007-09-17 16:40:40 · answer #2 · answered by Mark S 5 · 0⤊ 1⤋
Your bank will provide you with a statement of interest earned. You will have to pay taxes on interest earned in the 2007 period.
2007-09-17 16:33:26 · answer #3 · answered by Unsub29 7 · 0⤊ 0⤋
You'll get a 1099-int from the bank for 2008 showing the total interest, and will file it with your 2008 return in early 2009.
2007-09-17 16:53:29 · answer #4 · answered by Judy 7 · 0⤊ 3⤋
You report the earnings when received if you use a cash accounting method--in other words, in 2008. If you used an accrual method of accounting, you'd report the earnings as they accrue, not when they're paid.
2007-09-17 16:32:54 · answer #5 · answered by Still reading 6 · 0⤊ 4⤋