Is the interest I earn in a savings account tax-exempt?

[gopunk]

or do i have to report the 2 bucks i made?

 

[UltraQuiet]

Originally posted by: gopunk
or do i have to report the 2 bucks i made?

It is taxable.

 

[Sluggo]

Tax free?

Yeah right

Edit

And do go thinking if you dont report it, the gov't will be none the wiser. The bank mails the IRS a form stating that they gave you $2

 

[Aquaman]

I think it's taxable but only to a certain extent.......... they are not going to go after your $2 but if your account made say $1000+ then I think they would.

Cheers,
Aquaman

 

[mithrandir2001]

It's taxable but I think you can "ignore" reporting it if the interest amounts to under $50 a year.

 

[Heisenberg]

Definitely taxable. I'm not sure if it's considered income or something different like capital gains, though.

 

[Cyberian]

Originally posted by: Heisenberg
Definitely taxable. I'm not sure if it's considered income or something different like capital gains, though.

I think it's considered "interest".

 

[vi edit]

About the only type of interest that I know of that is tax exempt is interest earned in a ROTH IRA and interest earned from municipal bonds/money market accounts.

 

[Heisenberg]

Originally posted by: Cyberian

Originally posted by: Heisenberg
Definitely taxable. I'm not sure if it's considered income or something different like capital gains, though.

I think it's considered "interest".

There's actually a category called 'interest' on tax returns? Huh, didn't know that. I assumed it was filed under other categories. I really have to start paying more attention to my taxes.

 

[mithrandir2001]

Originally posted by: Heisenberg

Originally posted by: Cyberian

Originally posted by: Heisenberg
Definitely taxable. I'm not sure if it's considered income or something different like capital gains, though.

I think it's considered "interest".

There's actually a category called 'interest' on tax returns? Huh, didn't know that. I assumed it was filed under other categories. I really have to start paying more attention to my taxes.

Yea and that's why I use TurboTax. I think you can deduct the cost of the software, too, if you itemize. Oh boy, a $20 deduction.

 

[Woozle]

Your bank will send you a 1099-INT form. Report it on "Schedule B -- Interest and Dividend Income"

 

[gopunk]

interesting... i wonder why the irs hasn't come for me yet oh well, thanks guys... something to keep in mind the next time i guess

 

[Evadman]

The only non-taxable interest I know of is in an IRA. Actually it is deferred, but hey.

 

[bGIveNs33]

The only 2 types of tax free income are life insurance benefits and loans. Now if there was anyway to combine the two.... . There is something called a VUL, variable universal life that is a retirement package wrapped with insurance. Its a pretty cool little product.

-Billy

 

[PsychoAndy]

I think you have to have over $600 in income to start paying taxes. Or so says my mom. Someone PM CPA.

-PAB

 

[Mister T]

Originally posted by: Woozle
Your bank will send you a 1099-INT form. Report it on "Schedule B -- Interest and Dividend Income"

 

[mithrandir2001]

Originally posted by: PsychoAndy
I think you have to have over $600 in income to start paying taxes. Or so says my mom. Someone PM CPA.

-PAB

But everyone can take the standard deduction, which is $4500 or so. So if you earn less than that in a calendar year, you have no federal tax liability.

 

[Sluggo]

Originally posted by: mithrandir2001

Originally posted by: PsychoAndy
I think you have to have over $600 in income to start paying taxes. Or so says my mom. Someone PM CPA.

-PAB

But everyone can take the standard deduction, which is $4500 or so. So if you earn less than that in a calendar year, you have no federal tax liability.

Unless you are already being claimed as a dependent by someone.

 

[PsychoAndy]

This is the reason I dont do taxes. Or pay them for that reason.

-PAB

 

[mithrandir2001]

Originally posted by: Sluggo

Originally posted by: mithrandir2001

Originally posted by: PsychoAndy
I think you have to have over $600 in income to start paying taxes. Or so says my mom. Someone PM CPA.

-PAB

But everyone can take the standard deduction, which is $4500 or so. So if you earn less than that in a calendar year, you have no federal tax liability.

Unless you are already being claimed as a dependent by someone.

Nope. This is a common mistake. Everyone can take the standard deduction. If someone can claim you as a dependent, you cannot take the personal exemption (which is like $2800 per exemption). These are two different things.