Bank Bonus

[fad_shen]

What is the name of your state? IL

Hi All,

I have recently opened a bank account. As an incentive they gave me $30, however this was not shown on the tax form I got from them. Do I need to declare this as income and if so under what part?

Thanks,

FadyWhat is the name of your state?

[TinkerBelleLuvr]

Interest not reported on Form 1099-INT. Even if you do not receive Form 1099-INT, you must still report all of your taxable interest income.

Gift for opening account. If you receive noncash gifts or services for making deposits or for opening an account in a savings institution, you may have to report the value as interest.

For deposits of less than $5,000, gifts or services valued at more than $10 must be reported as interest. For deposits of $5,000 or more, gifts or services valued at more than $20 must be reported as interest. The value is determined by the cost to the financial institution.

Example.

You open a savings account at your local bank and deposit $800. The account earns $20 interest. You also receive a $15 calculator. If no other interest is credited to your account during the year, the Form 1099-INT you receive will show $35 interest for the year. You must report $35 interest income on your tax return.

http://www.irs.gov/publications/p550/ch01.html#d0e831

[fad_shen]

Dear Ginny,

Thank you for your quick reply. So I should add up all the interest repoted on 1099-INT forms and the bank bonus (which was not reported by the bank on 1099-INT) and put them in row 8a on my tax return (form 1040). However, wouldn't that make the IRS to ask questions as the total amount I am reporting is more than the amounts they have from the bank(s). Is it better to attach schedule B (although the total interested is less than $1500).

Thanks,

Fady

[TinkerBelleLuvr]

It does NOT raise flags if you report more than the 1099-INT's that you have received. Most banks won't issue you one if you made less than $10.00, so, if anything, it shows that you are an ethical tax payer.