How to Report Interest on a Joint Bank Account

The IRS makes sure someone pays taxes on the interest from a joint account.

The IRS makes sure someone pays taxes on the interest from a joint account.

If you squeeked out $10 or more in interest from a joint account, you're going to get a 1099-INT for your taxes. If you've got a joint account with your spouse and you're filing a joint return, just report the interest on the joint return. However, if the account is a joint account with someone you're not filing a tax return with, such as your live-in significant other, you'll need to file some additional paperwork to make sure both of you pay taxes on your fair share and to let the IRS know that all of the interest will be taxed.

Items you will need

  • IRS Form 1096
  • IRS Form 1099-INT
  • IRS Schedule B

Complete a Form 1099-INT that shows how much interest you received that is actually taxable to the other joint holder. On the form, include your own name, address and Social Security number as the payer of the interest and the joint account holder's information as the recipient. For example, if your 1099-INT shows $2,000 of interest income and your girlfriend is actually responsible for paying taxes on $800 of it, complete a 1099-INT that shows $800 of interest paid to her.

Submit the Form 1099-INT along with Form 1096 to the IRS before the end of February.

Report all of the interest reported on your 1099-INT on Schedule B. For example, if your 1099-INT says you received $2,000 of interest, report $2,000 of interest (don't worry, you're going to get it back in the next step).

Report the amount of interest that actually belongs to the joint bank account holder underneath all of your interest income as a "Nominee Distribution." This amount reduces your interest income when you total it up and report the total on line 2. Only the amount of interest you actually earned counts on your income taxes. Your joint account holder must report the remaining interest on her income tax return.


About the Author

Mark Kennan is a writer based in the Kansas City area, specializing in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."

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