Where interest from savings accounts goes on your tax return

Interest from a savings account is reported on Form 1040, Schedule B (Interest and Ordinary Dividends). You list the name of the bank, the account number, and the amount of interest earned during the tax year. The IRS matches this to the 1099-INT form your bank sends you, so the numbers must match.

If you earned less than $1,500 in interest and dividends combined, you can report the total directly on Form 1040 without filing Schedule B — but only if you have no capital gains to report. Most people with savings accounts will use Schedule B because it's simpler and safer than trying to calculate the threshold.

The interest amount comes from the 1099-INT your bank mails to you by January 31 of the following year. If you don't receive one by early February, contact your bank directly — they have your address on file and may need to resend it or correct an error.

Key Takeaways

  • Interest income is reported on Schedule B of Form 1040, using the exact amount shown on your 1099-INT from the bank.
  • Your bank sends a 1099-INT by January 31 each year; the IRS receives a copy and will flag mismatches between your return and the form.
  • If you earned interest at multiple banks, list each account separately on Schedule B with its own line.
  • Interest from savings accounts, money market accounts, and CDs all goes on Schedule B using the same process.

Getting your 1099-INT from your bank

Banks issue a 1099-INT for any account that earned $10 or more in interest during the calendar year. You should receive it by mail at the address on file with the bank, or you can download it from your online banking portal — most banks post it there before mailing the paper copy.

The form shows the bank's name and routing number, your account number, and the total interest paid. It also breaks down federal interest withheld (if any) and state interest withheld separately. Keep this form with your tax records; you don't send it to the IRS, but you need it to fill out Schedule B accurately.

If you have multiple savings accounts at the same bank, you may receive one 1099-INT listing all of them, or separate forms for each account. Either way, you'll need to add up the total interest from that bank when you fill out Schedule B.

Filling out Schedule B with your interest income

Schedule B has two parts: Part I for interest income and Part II for dividends. You only need to complete Part I. For each account, write the bank name, account number (you can abbreviate or use the last four digits for privacy), and the interest amount from the 1099-INT.

Add up all the interest from all your accounts and enter the total on line 4 of Schedule B. This total then transfers to Form 1040, line 2b (or the equivalent line on whichever 1040 version you're filing). The interest is taxed as ordinary income at your regular tax rate.

If you have only one savings account and earned less than $1,500 in interest and dividends combined, you can skip Schedule B entirely and report the interest directly on Form 1040, line 2b. But if you have any doubt, filing Schedule B is safer because it shows the IRS you've done the work to match the 1099-INT.

What happens if your 1099-INT doesn't arrive

Call your bank's customer service line and ask them to reissue the 1099-INT or confirm the interest amount over the phone. Have your account number ready. If the bank says they already mailed it, ask them to check the address on file — mail sometimes goes to an old address if you moved and didn't update the bank.

If you're filing before the 1099-INT arrives, you can file using the interest amount you see in your online banking account or on your last statement. Then file an amended return (Form 1040-X) once the 1099-INT arrives if the amount differs. The IRS expects this and won't penalize you for a small delay if you file in good faith.

If your bank closed or merged, contact the new bank or the FDIC if the bank failed. The FDIC can tell you which institution now holds your account records and can issue the 1099-INT.

Interest withheld by the bank

Some banks withhold federal income tax or state income tax directly from interest before crediting it to your account. This appears on the 1099-INT as "Federal income tax withheld" or "State income tax withheld." You report the gross interest (before withholding) on Schedule B, not the net amount.

The withheld amount is credited against your total tax liability when you file. If too much was withheld, you'll get a refund. If too little was withheld, you'll owe more. Either way, the 1099-INT shows exactly what was taken out, so the IRS can track it.

Withholding usually happens only if you didn't provide a valid Social Security number or tax ID to the bank, or if you're a nonresident alien. If you think withholding is wrong, contact the bank and provide Form W-9 (for U.S. citizens) or Form W-8BEN (for foreign nationals).

Reporting interest from joint accounts

If you own a savings account jointly with someone else, the 1099-INT lists the full interest amount and includes both Social Security numbers (or one if only one owner's SSN is on file). You and the co-owner must decide how to split the interest for tax purposes — usually 50/50, but it depends on your ownership agreement.

Each person reports their share on their own tax return. If the bank issued the 1099-INT in only one person's name, that person should contact the bank to request a corrected form that splits the income, or they can file Form 8949 (Sales of Capital Assets) to show the adjustment. Alternatively, the person who received the 1099-INT can report the full amount and the co-owner can file Form 8949 to claim their share as a deduction.

This gets complicated quickly, so if you have a joint account with significant interest, consider asking a tax preparer to handle the split. The IRS will see the 1099-INT and will want to know why the reported amount doesn't match.

Frequently Asked Questions

Do I have to report interest if I earned less than $10?

No. Banks only issue a 1099-INT for accounts that earned $10 or more in a calendar year. If you earned less, you still owe tax on it, but you report it based on your own records — your bank statement or online account history. Add it to Schedule B with a note that no 1099-INT was issued.

What if my 1099-INT shows the wrong amount?

Contact your bank immediately and ask them to issue a corrected 1099-INT (marked "Corrected"). The bank will send the corrected form to you and to the IRS. File your return using the corrected amount. If you already filed, you don't need to amend — the IRS will match the corrected 1099-INT to your return.

Can I deduct losses from my savings account interest?

No. Interest income is always positive; you can't have a loss from a savings account. If your bank charged fees that exceeded your interest, you still report the interest as income and cannot deduct the fees as a loss. You may be able to deduct investment fees in other situations, but not savings account fees.

Do I report interest from a money market account the same way?

Yes. Money market accounts, CDs, and regular savings accounts all report interest on 1099-INT and all go on Schedule B using the same process. The account type doesn't change how you report it — only the interest amount matters.

What if I moved and my bank sent the 1099-INT to my old address?

Update your address with the bank as soon as you move. If you don't receive the 1099-INT by mid-February, call the bank and ask them to reissue it to your current address or email it to you. You can also ask them to confirm the interest amount over the phone and file using that number while you wait for the form.