Form 1099-INT is an important income tax form issued by the Internal Revenue Service (IRS) to taxpayers that reports interest income received during the year. Interest payments are generally one of the sources of income that need to be included in the taxpayer’s income tax return, so it’s essential that taxpayers know exactly how much interest they’ve earned on their investments so they can accurately report it.

Any entity that pays interest of over $10 during the year must file a Form 1099-INT with the IRS, including banks, brokerage firms, mutual funds, and other financial institutions. Examples of the types of interest income that must be reported include interest on deposit accounts, dividends, and interest paid to the holder of a collateralized debt obligation (CDO).

Form 1099-INT reports different kinds of payments separately. It may include a breakdown of the different types of interest income and certain related expenses, such as investment expenses or origination fees.

Taxpayers are sent their Form 1099-INTs no later than January 31 of the following year. This should be received before taxpayers need to begin preparing their tax returns for the preceding year.

Form 1099-INT is an important form for taxpayers as it provides an accurate record of how much total interest income they’ve received during the year. Reporting this information accurately is essential for ensuring your taxes are prepared and filed correctly. Failing to report this interest income can result in a taxpayer having to pay the IRS back taxes.