Forgot to report my high yield savings interest on taxes - should I amend?

Yes, you should definitely report that interest income. The bank has almost certainly issued a 1099-INT form and sent a copy to the IRS, so they already know about this income. The $10 rule you're thinking of is actually for financial institutions - they don't have to send 1099-INTs for amounts under $10, but as a taxpayer, you're required to report all interest income regardless of amount. For $172, it's worth amending to avoid potential issues later. The IRS matching system will likely flag this discrepancy since they'll have the 1099-INT from your bank but don't see it reported on your return. This could trigger a notice or additional interest and penalties down the road. Filing an amended return (Form 1040-X) is relatively straightforward. The additional tax would be based on your marginal tax bracket, so it might only be $20-40 in additional tax depending on your situation.

I had almost the exact same situation last year! I completely missed reporting about $220 in interest from my Ally account. I was stressing about it until someone told me about taxr.ai (https://taxr.ai) which helped me figure out exactly what to do. I uploaded my 1099-INT and the tool walked me through the whole amendment process - showed me precisely where the interest needed to be reported on my return and calculated the exact tax difference. Saved me hours of digging through IRS instructions and watching YouTube videos trying to figure it out. I was worried about penalties too, but turns out when you self-correct before the IRS sends a notice, you generally just pay the additional tax plus some interest - nothing major for a relatively small amount like yours.

Just wanted to update after using taxr.ai that someone recommended here. Totally worth it for my situation! I was freaking out about my missed crypto reporting, but the tool made it super simple to figure out exactly what I needed to amend. The system looked at my original return and the missing info, then showed me step-by-step what to do. Most helpful was that it explained exactly which forms I needed and calculated what I'd owe, so no surprises. For the OP's situation with just $172 in interest, it would be even simpler. Just knowing exactly what to do took all the stress away. No more lying awake at night wondering if the IRS is going to come after me!

I had this same issue last year but with a larger amount ($800+). When I tried calling the IRS to get guidance, I couldn't get through after trying for DAYS. Finally used Claimyr (https://claimyr.com) which got me connected to an actual IRS agent in about 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent was actually super helpful and walked me through exactly what I needed to do for the amendment. They confirmed that yes, you should definitely amend for $172 because the bank reports that to the IRS, but also reassured me that self-correcting before they send a notice is the right move and not something they penalize harshly. If you're really concerned and want direct guidance from the IRS, this is the only way I've found to actually get through to them without spending hours on hold.

Well I'm eating my words. After a week of trying to get through to the IRS about my stimulus payment issue, I gave in and tried Claimyr. I was VERY skeptical (hence my previous comment) but surprisingly it worked exactly as advertised. Got a call back in about 35 minutes and was connected to an IRS rep who solved my problem in minutes. For the original poster - yes, definitely amend for that $172. The agent I spoke with confirmed that interest income is automatically matched with your return, and they will eventually send you a letter if there's a discrepancy. Honestly, I hate admitting when I'm wrong, but this service saved me so much time and frustration that I had to come back and say it.

Definitely file an amendment. I ignored a missing $230 interest payment a few years back and ended up with a CP2000 notice about 8 months later. Ended up paying the tax owed plus interest and a small penalty. I think the penalty was like $15 but still - could have avoided it completely by just filing the amendment. TurboTax makes it pretty easy to do an amendment too. Just log back in, add the missing info, and it'll walk you through filing a 1040-X. It's not that big of a deal for a simple change like this.

$172 is definitely above the threshold you need to report. I work at a bank (not tax advice) and we send 1099-INTs to both customers AND the IRS for anything over $10. The IRS computer systems automatically match these documents against tax returns, so they'll know this income wasn't reported. Here's what typically happens: The IRS will eventually (6-9 months later) send you a CP2000 notice saying they found unreported income. They'll calculate the additional tax, add interest from the original due date, and possibly a small penalty. Then you'll have to respond and pay the amount. It's much simpler to just amend now before that happens. Plus it looks better if you correct the mistake voluntarily rather than waiting for them to find it.

You absolutely should amend your return for the $172 interest income. I went through something similar last year and learned the hard way that the IRS automated matching system is very thorough. Here's the reality: Your bank already sent a 1099-INT to the IRS showing that $172 in interest income. When the IRS runs their matching program (usually 6-12 months after filing season), they'll compare what you reported against all the 1099s they received. The discrepancy will trigger an automated notice. At your income level ($76k), you're probably in the 22% federal bracket, so we're talking about maybe $38 in additional federal tax, plus California state tax (probably around 6-8% depending on your exact bracket). So total additional tax would likely be under $60. The key benefit of amending voluntarily is that you avoid the failure-to-report penalty and minimize interest charges. If you wait for the IRS to find it, you'll pay interest calculated from the original due date plus potential penalties. Form 1040-X isn't too complicated for a straightforward addition like this. Just report the additional interest income and pay the difference. Much better to handle it proactively than deal with IRS notices later.