- Form 1099-INT is not filed by the taxpayer. Instead the organization that paid the interest to the taxpayer files the form with the IRS and then sends a copy to the taxpayer for his records. The organization must complete a form for each person to whom it has paid at least $10 in specified common forms of interest such as bank accounts or savings certificates. For other forms of interest, such as interest on a tax refund, the threshold is $600. The organization must also file a 1099-INT, regardless of the amounts concerned, if it has withheld and paid foreign tax on the interest, or if it has withheld any federal income tax on the interest.
- Generally 1099-INT is only filed in regards to payments to individuals rather than organizations. There is no requirement to file if the interest recipient, the interest payment and the arrangement that produced the interest payment are all based outside the United States. The form is not used for cases where the interest is earned but not paid out, such as with an IRA.
- The taxpayer should use the information on the 1099-INT to assist in completing his tax return. The most common details to copy across are those for interest income and interest on government bonds, which go to line 8a of Form 1040, and tax-exempt interest, which goes to line 8b.
Interest from a product known as a private activity bond is not copied across to Form 1040 but rather line 12 of Form 6251, which is used for the calculation of the alternative minimum tax. - This is a special form of trust held by a third-party, such as a broker. Such trusts must not only complete a 1099-INT but must also provide a tax information statement to the trust interest holder -- that is, the third party. This statement must include all the information from the 1099-INT plus additional details such as individual transactions made by the trust, rather than simply a summary of the income.
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