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The Hows of Taxes

Module 3: Interest Income

 

Photo of a bank officer discussing a transaction with two customers.
Interest is the charge for the use of borrowed money. Interest income is income earned through depositing money in savings programs, buying certificates of deposit (CDs) or bonds, or lending your money. Use the resources below to learn more about interest income.

materials:

Tax Tutorial
Tax Tutorial: Interest IncomeDiscover what interest income is, where it comes from, and how it should be reported.
Simulation
Simulation 3: Using Your W-2 and Form 1099-INT to File Your 1040Help Tasha Miller, counselor at the Job Center, report her interest income on her Form 1040.
Fact Sheet
Fact Sheet: Interest IncomePrint this fact sheet on interest income.
Assessment
Assessment: Interest IncomeReview your understanding of interest income.
skill check:
Check your understanding of what interest income is and how it should be reported. Indicate whether each of the statements below is true or false by clicking on the correct answer. To assess your answers, click the Check My Answers button at the bottom of the page.
  1. Interest income is earned on money in savings accounts.
  • A.
  • B.
  1. All interest income is taxable.
  • A.
  • B.
  1. Tax-exempt interest is not reported on the individual income tax return.
  • A.
  • B.
  1. Form 1099-INT is used to report interest income.
  • A.
  • B.


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