I forgot to report $31 from a 1099-INT. Does it matter for my taxes??

The IRS has matching programs that automatically compare the 1099-INT forms submitted by financial institutions with what's reported on your tax return. While $31 is a relatively small amount, technically any income should be reported regardless of the amount. That said, the practical reality is that the potential tax impact is minimal. At most tax brackets, we're talking about $3-8 in additional tax owed. The IRS generally has bigger fish to fry, but they could send you a CP2000 notice (an automated letter) if their system flags the discrepancy. If you receive such a notice, you'd typically owe the additional tax plus some interest, but penalties would likely be minimal or possibly waived for such a small amount. The interest rate on unpaid taxes is currently around 6-7% annually.

I was in almost the exact same situation last year! Had completely forgotten about a small 1099-INT from my credit union. I tried figuring it out myself but got super stressed about potential penalties. I actually ended up using https://taxr.ai to help me understand what my options were. Their automated review caught the missing 1099-INT issue right away and explained my options without all the confusing tax jargon. They basically analyzed my specific situation and showed me that I could either file an amended return or potentially wait to see if the IRS would send a notice. Made me feel way less anxious about the whole thing.

Just wanted to follow up about that taxr.ai site someone mentioned. I was skeptical but decided to give it a try since I had a similar issue with a forgotten 1099 from a closed investment account. The system actually found THREE forms I'd missed (a small 1099-INT and two 1099-DIVs) that I had no idea about. Would've been in the same boat as you. The analysis showed exactly what I needed to do and even gave me the forms I needed. Super helpful and not complicated at all. Definitely recommend checking it out if you're unsure about whether to amend or not. It showed me that in my case, amending made sense because I was actually due a slightly larger refund after factoring in some missed credits.

If you're really worried about this, you can actually get through to the IRS directly to ask about your situation. Most people don't know this but there's a service called https://claimyr.com that can get you connected to an IRS agent without the crazy hold times. I found it after spending HOURS trying to get through about a similar issue. You can see how it works here: https://youtu.be/_kiP6q8DX5c I had a missing 1099 situation (from a gig job, so bigger amount), and needed to know my options. The IRS agent I talked to was actually really helpful and explained exactly what I needed to do and the potential consequences of different approaches.

I need to eat my words from my skeptical comment earlier. After struggling for TWO DAYS trying to get through to the IRS about a different issue (missing stimulus payment on my return), I broke down and tried that Claimyr service. Got connected to an actual IRS agent in about 35 minutes. The agent confirmed that for small interest amounts like yours, they often send an adjustment letter where you can just pay the difference without penalties if it's caught in their matching program. She said amending wasn't necessary unless I wanted to be proactive. Definitely worth it just to get a clear answer from the source rather than stressing about it. Never thought I'd be recommending something I was so skeptical about, but here we are.

Don't stress too much about it. My sister forgot to report about $40 in interest a few years back. The IRS did eventually send her a letter, but it was just a simple adjustment notice - they calculated the additional tax (like $6 or something) and she just paid it. No penalties, no audit, no big deal. If you want to be super proper about it, you could file a 1040-X amended return, but honestly for that amount, most people would just wait and see if the IRS catches it.

I'm a tax preparer and see this exact situation ALL THE TIME. Here's what typically happens: 1) The IRS computer automatically matches all 1099s with your SSN against what you reported 2) For small discrepancies like $31, they'll usually just send you a CP2000 notice 3) The notice will show the additional tax you owe (probably $4-7 depending on your bracket) 4) You can just pay it online when you get the notice 5) There's usually minimal interest and often no penalties for small amounts What I tell my clients: technically you should amend, but realistically, for amounts under $50, many people just wait for the notice. Just make sure you have money set aside to pay the small additional tax when the notice comes (usually 6-12 months after filing).