Like secret agents in old spy movies, taxpayers are only numbers to the federal government. For example, the Internal Revenue Service only cares about the taxpayer number associated with a joint account, which is the Social Security number for one of the account holders. Account income is reported annually on a Form 1099 to the person with that identifying number. To avoid a nasty letter from the government, a tax return should match the reported income and correctly adjust for the joint party’s share.
Step 1
Enter the full amount of interest or dividend income from the joint account on Schedule B of the tax return for the person receiving Form 1099. This individual is the account holder whose Social Security number is provided to the financial institution.
Step 2
List a description on the next line of Schedule B stating that account income was “received as nominee for” followed by the Social Security number of the other joint account holder.
Step 3
Place the portion of account income claimed by the other joint account holder as a negative number on the line of Schedule B showing that person’s Social Security number as nominee.
Step 4
State the portion of account income claimed by the other joint account holder on her tax return just as if she had received a separate Form 1099 for this amount.
