Confused about reporting withdrawal fees on 1099-INT for first-time tax filing

The good news is you don't need to worry about reporting that withdrawal fee! Bank fees like early withdrawal penalties on regular savings accounts are not reportable on your tax return. The 1099-INT only reports the interest income you earned from the bank. If you received this form, you'll need to report the interest shown on it when you file your taxes. But regular bank account fees aren't considered taxable events. You're thinking of early withdrawal penalties from retirement accounts like IRAs or CDs (Certificates of Deposit), which are different. Those penalties are often reportable because they involve pre-tax money or tax-deferred accounts.

I was in this exact situation last year and was so confused about what needed to be reported! I tried reading through all the IRS publications but still wasn't 100% sure. Then I found this tool called taxr.ai (https://taxr.ai) that analyzed my 1099-INT form and explained exactly what I needed to report. Basically it confirmed what the previous commenter said - you only need to report the interest income shown on the 1099-INT. The withdrawal fees aren't reportable on your tax return. The tool actually scanned my tax documents and highlighted just the numbers I needed to enter on my return. Saved me tons of time trying to figure out what was relevant!

Just wanted to follow up about that taxr.ai thing. I tried it out after my initial skepticism and it was actually really helpful! I had multiple 1099-INTs from different accounts plus some investment stuff and was confused about what needed to be reported where. Uploaded everything and it immediately highlighted all the important boxes and explained exactly what they meant and where they should go on my return. It even caught a small interest payment from an old account I almost forgot about. Definitely worth checking out if you're confused about any tax forms, not just for 1099-INT stuff.

If you've been trying to call the IRS to ask about this, good luck! I spent TWO WEEKS trying to get through to ask about some 1099 questions. Then I found this service called Claimyr (https://claimyr.com) that got me through to an actual IRS agent in like 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent confirmed what others are saying - normal bank withdrawal fees aren't reportable on taxes. Only the interest income shown on your 1099-INT needs to be reported. Saved me so much stress knowing I was doing it right!

Ok I need to admit I was totally wrong about Claimyr being a scam! After my skeptical comment I decided to try it anyway because I was desperate to ask about some 1099 issues after trying for days to reach the IRS. It actually worked exactly as advertised. I got a call back within 35 minutes with an actual IRS rep on the line. They answered all my questions about my 1099 forms and even helped me with another issue I had with my refund from last year. Huge time saver and the peace of mind was worth it. Sorry for doubting!

Since we're talking about 1099-INTs, make sure you check if you need to also report this interest on your state tax return! Some states have different rules about interest income. In my state they make us report all interest even if it's from US govt bonds that aren't taxable for federal. Stupid complicated system ugh.

As someone who works at a bank (not a tax professional tho!), I can confirm what everyone's saying. Regular bank fees aren't reportable on taxes. The 1099-INT just shows interest EARNED, not fees PAID. Think of it this way - the govt only cares about taxing money you receive (income), not money you pay out in most cases. Bank fees are just a cost of having the account, like paying for a haircut or something.