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Posted by Harlan Lunsford on February 27, 2008, 7:02 pm
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Jonathan Kamens wrote:
>> Would the bank actually go to the bother of eliminating the small
>> amounts?
>
> Yes, since the IRS seems to require it. The publications on
> the IRS Web site state that 1099-INT interest of $10 or more
> should be reported to the IRS. The implication, although I
> cannot find it stated explicitly anywhere, is that interest
> of less than $10 should NOT be reported. I imagine that
> there are a hell of a lot of bank accounts whose annual
> interest falls under teh $10 threshold, and the IRS doesn't
> want to deal with all that extra data.
>
>> Seems that the
>> programming and coincident possibility of error and NOT reporting
>> something that should be included,
>> would make that unlikely.
>
> Seems like it's awfully easy to add a "WHERE
> SUM(interest_paid) >= 10" to the SQL statement that generates
> reporting data and forms :-).
>
>> My guess, and it's only a guess, is that they would prepare the file
>> transmission to the IRS so that it includes all
>> paid interest amounts to account holders.
>
> Any 1099 data reported to the IRS must also be reported to the
> payees. They can't report interest to the IRS and then decide
> not to send out 1099-INT's to some account-holders.
>
Rest assured that if not required, i.e. less than 10$, banks won't
include in their annual submissions.
In practice I used to see 1099-int for amounts less than 10$, but in
last several years, nothing.
If I WERE IN CHARGE!....... all interest amounts would be reportable
to IRS, if for no other reason, to keep taxpayers in mind that all
income must be reported.
ChEAr$,
Harlan Lunsford, EA n LA
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