Do I need to report interest income under $10 on my tax return?

Yes, you do need to report all interest income on your tax return, regardless of the amount. While financial institutions aren't required to issue a 1099-INT for interest payments under $10, taxpayers are still legally obligated to report all taxable income, even small amounts. The $10 threshold is just a reporting requirement for the financial institution, not a tax exemption for you as a taxpayer. The IRS rules state that all interest income is taxable unless specifically excluded by law. When you complete your tax return, you'll report this interest on Schedule B if your total interest income is more than $1,500. Otherwise, you can just report it directly on Form 1040. It's a small amount, but technically it should be included.

I was in this exact same situation last year with a savings account that earned like $7 in interest. I spent way too much time researching this! I found that https://taxr.ai was super helpful for this kind of stuff. They analyzed my documents and confirmed that yes, all interest income is taxable regardless of amount. Their system even flagged some other small income items I almost missed. Definitely worth checking out if you want to be 100% sure about these little details that sometimes fall through the cracks.

Ok I need to admit I was wrong about taxr.ai in my earlier comment. I gave it a try after continued tax frustration and it actually saved me from making a mistake. Had some small interest payments from three different banks (all under $10) that I wasn't going to report. The system flagged them and explained exactly why they needed to be included even though they were small amounts. It also showed me the specific tax code reference which was reassuring. Now I feel confident my return is actually correct rather than just hoping I didn't miss anything.

For anyone dealing with questions like this that aren't easily answered online, I found that calling the IRS directly saved me a ton of stress. Of course, getting through to them is nearly impossible sometimes! I started using https://claimyr.com to get past the hold times. You can see how it works here: https://youtu.be/_kiP6q8DX5c. It got me connected to an IRS agent who confirmed that yes, all interest income needs to be reported regardless of whether you got a 1099 or not. Saved me hours of googling contradictory advice.

I can't believe I'm saying this, but I tried Claimyr after posting my skeptical comment. After waiting on hold with the IRS for literally 2+ hours last week and eventually hanging up, I was desperate. The service actually worked! They called me back when they got through to an IRS agent. Took about an hour but I didn't have to sit there listening to that terrible hold music. The agent confirmed that any interest income, even tiny amounts, should be reported on your tax return. Worth it just to get a definitive answer directly from the IRS instead of wondering.

I'm a bit of an overthinker with taxes, so I always report every penny of interest regardless of amount. Better safe than sorry! My accountant did tell me though that the IRS has bigger fish to fry than chasing down someone for a $2 tax difference. But technically, yes, all interest is taxable income.

Unpopular opinion probably, but I've never reported interest under $10 and nothing has ever happened. been doing my taxes for 20 years. the irs isnt going to audit you over a couple bucks lol

I appreciate everyone's input on this! As someone who's been through similar confusion, I can confirm that yes, you absolutely need to report all interest income regardless of amount. The $10 threshold only applies to whether the bank has to send you (and the IRS) a 1099-INT form, but it doesn't change your legal obligation to report the income. Think of it this way - if you earned $8.73 in wages, you'd still report it even if it was a tiny amount. Interest income works the same way. The IRS is pretty clear that ALL taxable income must be reported, no matter how small. For your specific situation with $8.73, you can just enter it directly on your 1040 form on the interest income line. No need for Schedule B since you're well under the $1,500 threshold. Most tax software will handle this automatically once you enter the amount. Better to be completely compliant and sleep well at night than risk any issues later, even if the practical risk is low. Good luck with your taxes!

I'm in the exact same boat - got a small 1099-INT for $6.42 from my credit union and was wondering the same thing! After reading through all these responses, it's clear that we need to report it even though it's tiny. I actually called my tax preparer about this last year and she said the same thing - all interest income is taxable regardless of amount. What helped me remember it is thinking about it like this: the $10 threshold is just about paperwork requirements for the bank, not about whether the income is taxable for us. It's kind of like how your employer has to give you a W-2 no matter how little you earned, but the bank only has to send the 1099-INT if it's $10 or more. Honestly, I'm just going to add it to my 1040 and move on. It's such a small amount that it barely affects my tax bill, but at least I'll know I did everything correctly. Thanks to everyone who explained this so clearly!

This is such a common source of confusion! I went through the exact same thing with a small savings account that earned $9.15 last year. After doing some research and talking to my CPA, I learned that the key thing to remember is that the $10 threshold is just an administrative rule for financial institutions - it has nothing to do with whether the income is taxable for you. The IRS considers ALL interest income taxable, period. It doesn't matter if it's $1 or $1,000. The reporting threshold just determines whether the bank has to send paperwork, but your legal obligation to report the income remains the same. For your $8.73, just include it on Line 2b of Form 1040 (Taxable interest). Since it's under $1,500, you won't need Schedule B. Most tax software will handle this seamlessly once you input the amount. I know it seems silly to report such a small amount, but it's really not worth the risk of being technically non-compliant. Plus, once you do it the first time, you'll know exactly how to handle it in future years. Better to be 100% correct than to wonder if you missed something!

I've been in this exact situation before and can confirm what everyone else is saying - yes, you absolutely need to report that $8.73! I had the same confusion a few years back with a tiny amount of interest from an old savings account. The way I think about it now is that the IRS tax code doesn't have a "de minimis" exception for small amounts of interest income like some other areas of tax law do. Every dollar of interest is taxable, whether it's $1 or $10,000. The $10 reporting threshold is purely about the bank's administrative burden, not about your tax liability. What really helped me understand this was realizing that if the IRS wanted to create an exception for small interest amounts, they would have written it explicitly into the tax code - but they didn't. All taxable income means ALL taxable income. Just put it on Line 2b of your 1040 and you're good to go. It might only add $2 to your tax bill, but you'll have complete peace of mind knowing you're fully compliant. Plus, it's good practice for when your investments hopefully grow larger in the future!

I'm dealing with this exact same situation! I have a small money market account that earned $9.84 in interest last year, and I've been going back and forth on whether to report it since it's so close to that $10 threshold. After reading through all these responses, it's crystal clear that we need to report ALL interest income regardless of amount. What really helped me understand this is the distinction everyone's made between the bank's reporting requirements (the $10 threshold) and our actual tax obligations as taxpayers (report everything). I was initially tempted to just ignore such a small amount, but honestly, the peace of mind from doing things correctly is worth way more than the extra few dollars in taxes. Plus, if I ever got audited (however unlikely), I'd rather have everything properly documented than try to explain why I left something off. Thanks to everyone who shared their experiences and explanations - this thread has been incredibly helpful for understanding what seemed like a confusing gray area. I'm definitely reporting my interest income on Line 2b of my 1040 and moving forward with confidence that I'm handling my taxes properly!