Interest on savings accounts
If your savings accounts are in joint ownership (my son and I), is he Subject to paying taxes on the interest accruals, or is my tax payment on said interest adequate?
Best Answer
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Hello, Dalebohn_1!
That is a great question!
In general, the interest income would be attributed to each owner based on their stake in the account. If only your SSN is on the account, which can happen for accounts co-owned by a parent and child, the bank will only send you a Form 1099-INT for the amount of interest earned. If your son did not make deposits to the account, you would report the full amount on your tax return. If your son made significant deposits to the account and you're the only one who receives the Form 1099-INT, you can issue a Form 1099-INT to your son. This Form 1099-INT would also need to be sent to the IRS.
You'd report the full 1099-INT you received from the bank on your return and then indicate that part of the interest income is interest income received as a nominee.
Let me know if you have any follow-up questions or concerns!
Answers
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Thanks 😊