This has been such an enlightening thread! I'm completely new to treasury investing and just purchased my first treasury notes last month. Like many others here, I was puzzled when I saw the accrued interest amount buried in the "Supplemental Information" section of my broker statement without any clear guidance on what to do with it. I paid $442 in accrued interest when I bought the notes, and I was starting to panic thinking I'd have to pay taxes on interest that accumulated before I even owned the securities. Reading through all these detailed explanations has been incredibly helpful - especially the step-by-step guidance on how to handle the Schedule B adjustment. It's really reassuring to see that this is such a common issue for new treasury investors and that there's a straightforward solution. I'll definitely be downloading IRS Publication 550 to review the official guidance, and I love the idea of creating a tracking spreadsheet to stay organized for future purchases. One thing that really strikes me about this discussion is how much knowledge gets shared in this community. The fact that experienced investors take time to explain these complex tax situations in detail really helps newcomers like me navigate what could otherwise be overwhelming. Thank you to everyone who contributed their experiences and expertise - this thread has transformed my anxiety about treasury bond taxes into confidence that I can handle this correctly!

As someone who's been investing in treasuries for several years now, I want to emphasize how important it is to get this accrued interest adjustment right from the beginning. I see a lot of great advice in this thread, and I'd like to add a few practical tips that have helped me over the years. First, when you're making that negative adjustment on Schedule B, be very specific with your description. I always write something like "Less: Accrued interest paid on treasury note purchases per IRS Pub 550" - this references the official guidance and makes it clear this isn't some random deduction I'm making up. Second, for those planning multiple treasury purchases, consider timing your purchases strategically. If you buy right after a coupon payment date, you'll pay minimal accrued interest. If you buy right before a coupon payment, you'll pay nearly a full period's worth. Neither approach is wrong, but understanding this can help you plan better. Finally, don't forget about state taxes! Most states that have income taxes follow the federal treatment for this adjustment, but a few have different rules. Check your state's guidance or consult a tax professional if you're unsure. The accrued interest adjustment really isn't as complicated as it seems initially - once you do it the first time, it becomes routine. Keep good records and don't hesitate to reference Pub 550 if you need confirmation you're doing it right.

One important thing nobody mentioned yet - if you're filing electronically, you need to make sure you're using the right form! The IRS has been phasing out 1099-MISC for nonemployee compensation and now requires 1099-NEC for contractor payments. 1099-MISC is still used for other types of payments like rent, prizes, etc. Made this mistake last year and had to refile everything 😭

Just want to add another perspective on electronic filing options! I've been helping small businesses with their 1099 filings for years, and here's what I've found works best: For someone with 8 contractors like you mentioned, I'd definitely recommend going with a reputable tax software or third-party service rather than trying to navigate the IRS FIRE system directly. The learning curve and time investment just isn't worth it for that volume. A few additional tips that might help: - Make sure you have all your contractors' correct legal names and TINs BEFORE you start filing. Mismatched information is the #1 cause of rejections. - Keep digital copies of all the 1099s you send to contractors - you'll need them for your own tax return. - If you use accounting software like QuickBooks, make sure it's the version that includes 1099 e-filing. The basic versions sometimes don't have this feature. Also, don't stress too much about the electronic vs paper distinction - the IRS actually processes electronic returns much faster and with fewer errors. You made the right choice switching away from paper filing! The electronic confirmation you get when filing is also really helpful for your records.

Just to add to what others have said about the reporting thresholds - I work in banking compliance and can confirm that banks are required to file information returns (Form 1099-INT) with the IRS for ANY amount of interest paid, regardless of how small. The $10 threshold only determines whether they're required to send YOU a copy. So even if you earned $2 in interest and didn't get a 1099-INT in the mail, the bank still reported that $2 to the IRS. This means their computers will expect to see that income on your tax return. The good news is that for small amounts under $1,500 total, you can just report the total on Line 2b of Form 1040 without having to fill out Schedule B. But definitely don't skip reporting it entirely - the IRS matching system is pretty sophisticated these days and will catch discrepancies, even small ones. For your situation with multiple inactive accounts, I'd recommend calling each bank's customer service line. They can usually provide you with a year-end interest summary over the phone, which will save you from having to dig through months of statements.

Just wanted to share my experience as someone who went through this exact situation last year. I had 8 different bank accounts from rate-chasing and moving money around, most earning under $50 each in interest. I initially tried to ignore the smaller amounts (we're talking $3-15 per account), but after reading about the IRS matching systems, I decided to be thorough. I called each bank and asked for my "total interest earned for tax year 2023" - most representatives knew exactly what I needed and could provide it immediately. What surprised me was that two banks actually HAD issued 1099-INT forms electronically that I never knew about because I hadn't checked their online portals. The amounts were $12 and $18 respectively - just above that $10 threshold. The whole process took me about 2 hours total, and I ended up reporting an additional $127 in interest income that I would have missed otherwise. Not a huge amount, but definitely not worth risking an IRS notice over. Plus, now I know for this tax year to check all my bank portals in January and keep better records throughout the year. My advice: just bite the bullet and track it all down. It's tedious but not as bad as you think, and you'll have peace of mind knowing everything is properly reported.

Hi, I'm a green card holder who had this exact situation for 3 years. I filed every year even with no income to report. When I applied for citizenship, the officer specifically asked for all my tax returns and seemed pleased I had consistently filed, even with zeros. Just my personal experience, but I'd 100% recommend filing.

I went through this exact situation with my brother who's a green card holder. After researching extensively and consulting with an immigration attorney, here's what I learned: Technically, if your spouse truly has zero income and falls below the filing threshold, they're not legally required to file. However, there are several compelling reasons to file anyway: 1. **Immigration benefits**: When applying for citizenship, USCIS often requests tax transcripts as evidence of compliance with U.S. laws. Having a consistent filing history, even with zero income, demonstrates good faith effort to follow tax obligations. 2. **Documentation**: Filing creates an official record that your spouse was present in the U.S. and aware of their tax responsibilities, which can be valuable for future immigration processes. 3. **No penalties**: There's no downside to filing a zero return - it's free using IRS Free File options and takes minimal time. 4. **Peace of mind**: Eliminates any uncertainty about compliance and creates a paper trail showing responsible behavior. My brother filed zero returns for two years before getting work authorization, and during his citizenship interview, the officer specifically asked for tax returns. Having them available made the process much smoother. I'd strongly recommend filing - it's a simple safeguard that protects their immigration status.

Just wanted to add another important consideration for your 529 planning - make sure you understand the "enrolled at least half-time" requirement for room and board expenses. The IRS requires you to be enrolled at least half-time at an eligible institution for housing and food costs to qualify as 529 expenses. Also, regarding your security system question - while utilities like water and electricity are generally accepted as part of housing costs, security systems fall into more of a gray area since they're not essential utilities. I'd be conservative with that one unless you can show it's required by your lease or building management. For meal expenses, stick to reasonable grocery costs and occasional dining out. The key word is "reasonable" - the IRS looks at whether your food expenses align with what a typical student would spend in your area. Keep your receipts organized by month so you can track whether you're staying within your school's meal allowance limits.

The "half-time" enrollment requirement is typically defined by your specific school, but it's usually around 6 credit hours per semester for graduate students (compared to 12 for full-time). I'd recommend checking with your registrar's office or financial aid office to get the exact definition your school uses, as this can vary between institutions. One thing I've learned from my own 529 experience is to be extra careful about summer terms or lighter course loads. If you drop below half-time enrollment during any period when you're paying housing costs with 529 funds, those expenses could become non-qualified for that time period. Also, regarding documentation - I keep a simple spreadsheet that tracks my monthly 529 withdrawals against my qualified expenses (tuition, rent, utilities, groceries) with running totals. It makes tax time much easier and gives me confidence I'm staying within the qualified limits. The key is being able to show that every dollar withdrawn had a corresponding qualified educational expense in the same calendar year.