The interest that you receive from banks and other financial institutions is usually taxable. To help you, and the government, make sure that you are accurately reporting interest income, it will be listed on a Form 1099-INT.

Function

The Form 1099-INT lists the amount of taxable income you have earned from all of your accounts with a particular financial institution. For example, if you earned interest on both your checking and savings accounts with the same bank, you would only receive one 1099-INT.

Size

Financial institutions will only send you a 1099-INT form if you have earned at least $10 in interest with them.

Time Frame

Banks and financial institutions are required to mail the Form 1099-INT by January 31 for interest accrued in the previous year. For example, Form 1099-INTs showing interest earned in 2009 will be mailed by Jan. 31, 2010.

Identification

The Form 199-INT will show how much of your interest is taxable and how much is tax-free. It also show how much, if any, is withheld for federal taxes or the amount that was paid in foreign taxes. However, most people do not have taxes withheld on their interest payments.

Effects

If you have more than $1,500 in interest in total, you must file your taxes using Form 1040 and attach Schedule B which details how much interest you earned from each institution. You also need to attach the Form 1099-INTs to your tax return for verification.

Source:

Form 1099-INT

MSN Money: Form 1099-INT

TCF Bank - Year-End Interest and Tax Reporting