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!