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what is taxable interest and where is it on the 1099 form

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what is taxable interest and where is it on the 1099 form ?
Submitted: 6 years ago.Category: Tax
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5/2/2011
Tax Professional: Robin D., Senior Tax Advisor 4 replied 6 years ago
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15,871
Experience: 15years with H & R Block. Divisional leader, Instructor
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Robin D :

Hello and thank you for using Just Answer

Robin D :

Examples of taxable interest are interest on bank accounts, money market accounts, certificates of deposit, and deposited insurance dividends. Interest on insurance dividends left on deposit with the Department of Veterans Affairs, however, is not taxable. Interest on Series EE and Series I U.S. Savings Bonds generally does not have to be reported until the bonds mature or are redeemed.


Certain distributions commonly referred to as dividends are actually interest. They include "dividends" on deposits or on share accounts in cooperative banks, credit unions, domestic building and loan associations, domestic federal savings and loan associations, and mutual savings banks. You should receive Copy B of Form 1099-INT (Interest Income) from the payer of these dividends. You must report to the IRS all taxable interest received even if you do not receive Copy B of Form 1099-INT.

On the 1099INT the interest will be shown in Box 1.

Customer:

box 1 on my 1099-R is gross distribution. that is the same thing as taxable interest?

Robin D :

No, your 1099R is for a distribution from a retirement account or pension.

Customer:

on my 1040 it asks for taxable interest. would that have anything to do with my 1099R.

Robin D :

NO, the 1099R information is not under interest. If you have a 1099INT or you have one of the accounts like I mentioned in first message that you earned money on for investing in that account, then that amount earned is interest.

Customer:

Thank you so much!

Robin D :

You are welcome. Your 1099R amounts will be shown on either Lines 16a and b or 15a nad b dependeing on what type the distribution was from.

Robin D :

IRAs are on Line 15a and b and pensions and annuities are on 16a and b

Robin D :

Did you have any more questions about interest?

Customer:

one more question. do I include the federal income tax withheld on my 1099R on line 7 on 1040EZ added to my federal income tax withheld on my W2?

Robin D :

You must use Form 1040A if you have a 1099R you can not use EZ.

Robin D :

The withholding will be shown on Line 38 and the 1099R box 1 will be on Line 11a and b (for IRA diostributions) or 12a and b for Pension and annuities.

Robin D :

If you need the 1040A form here is a link to the form:
http://www.irs.gov/pub/irs-pdf/f1040a.pdf

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15,871
Experience: 15years with H & R Block. Divisional leader, Instructor
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