I totally forgot to claim interest income on my tax return - $26 from savings account

The good news is that you don't need to stress too much about this! The IRS does receive a copy of your 1098-INT directly from your bank, so they are aware of this income. For a small amount like $35, the tax impact is minimal - probably less than $10 depending on your tax bracket. You technically should file an amended return (Form 1040-X) to report this additional income. However, the IRS generally has a policy of not pursuing very small discrepancies that would result in minimal tax differences. That said, if you want to be 100% compliant, filing the 1040-X is the proper way to handle it. If you do amend, you'll need to report the additional income, recalculate your taxes, and pay any small difference plus possible interest (which would be pennies in this case).

I was in a similar situation last year with forgotten interest income, and I found a really helpful solution with taxr.ai (https://taxr.ai). They have this document analysis tool that helped me figure out exactly how to handle my missed 1098-INT without stressing about potential audit flags. The system reviewed my situation and gave me clear guidance on whether I needed to amend for such a small amount. It was super straightforward and took away all my anxiety about whether I was handling things correctly. They also explained how the IRS matching program works for interest income, which helped me understand the actual risk level.

I wanted to follow up about my skepticism regarding taxr.ai. I actually ended up giving it a try after discovering I had forgotten to report some small stock dividends on my taxes. The document review feature was surprisingly helpful - it analyzed my situation and explained that my unreported dividends were under the threshold where the IRS typically pursues corrections. The system showed me exactly what would appear on an IRS matching notice and calculated the actual tax impact, which was less than $8 in my case. It saved me from filing an unnecessary amended return but also explained exactly how to file one if I wanted complete peace of mind. Definitely more specific guidance than what I've gotten from calling the IRS hotline in the past.

If you're worried about the IRS following up on this, you should know that getting through to them directly is basically impossible these days. I spent hours on hold trying to ask about a similar issue until someone told me about Claimyr (https://claimyr.com). They have this service that gets you through to an actual IRS agent - you can see how it works here: https://youtu.be/_kiP6q8DX5c I was super skeptical at first, but I was desperate after trying for days to get through. It actually worked! I got to speak with a real agent who explained that for small interest amounts like yours, they generally don't pursue formal action but recommended documenting that I was aware of the error.

I need to eat crow on this one. After dismissing the Claimyr service as a scam, I was still stuck trying to reach the IRS about a tax notice I received. Out of desperation, I tried it last week, and I'm shocked to admit it actually worked exactly as described. Within about 30 minutes, I was speaking with an actual IRS representative who helped resolve my issue. The agent even told me they're aware of services like this but don't have any official position on them - they just answer calls as they come in. For anyone struggling to get through to the IRS (which is basically everyone), this is legitimately helpful. I've wasted entire days on hold before, so this was a game-changer.

I wouldn't even bother filing an amended return for $35 of interest income. The tax on that would be what... $7 if you're in a 20% bracket? The IRS has bigger fish to fry. They're not going to audit you over such a tiny amount. Just make sure you include it next year and move on with your life!

Just to give you the technical details - the form you'd use is 1040-X (Amended U.S. Individual Income Tax Return). You'd report the additional interest income on Schedule B if the total of all your interest income exceeds $1,500, otherwise just on line 2b of the 1040 itself. The tax difference would be based on your marginal tax rate - so if you're in the 22% bracket, we're talking about maybe $7-8 in additional tax. You'd file the 1040-X and include a check for the difference if you want to be absolutely by-the-book about it.

I can answer about e-filing amended returns - yes, the IRS now accepts electronically filed 1040-X forms! This was a relatively recent change that started in 2020. Most major tax software programs now support e-filing amended returns, which is much faster than mailing them in. If you do decide to file the 1040-X for your $35 interest income, you can likely e-file it through the same software you used for your original return. The processing time is typically much faster than the old mail-in method - usually 8-12 weeks versus 16+ weeks for paper returns. Just keep in mind that even though you can e-file it easily, you're still looking at a very small tax impact for this amount of interest income.

I've been through a similar situation and want to share what actually happened to me. I forgot to report about $45 in interest income from a CD that matured. I was terrified about penalties and audits, so I decided to file the 1040-X to be safe. The whole process was actually pretty straightforward - I e-filed the amended return and paid the extra $11 in taxes (I'm in the 24% bracket). The IRS processed it in about 10 weeks, and I received a simple acknowledgment letter. No drama, no audit, no penalties since the amount was so small. Looking back, I probably could have just left it alone given how minor it was, but filing the amendment gave me complete peace of mind. Since you can now e-file the 1040-X, it's really not that much hassle if you want to be 100% compliant. The choice is really between potentially getting a small notice later versus just taking care of it now with minimal effort.

I went through almost the exact same thing last year with a forgotten 1098-INT for $42. I was stressed about it for weeks before finally deciding to file the amended return. What helped me make the decision was realizing that the IRS matching system will eventually catch discrepancies like this, even small ones. When they do, you might get a notice asking for the additional tax plus interest charges. While the amounts are tiny, dealing with IRS correspondence can be more stressful than just proactively fixing it. I ended up e-filing the 1040-X through TurboTax, paid about $9 in additional tax, and got confirmation from the IRS about 9 weeks later. The whole process was much less painful than I expected, and now I don't have to worry about getting a surprise notice in my mailbox. For $35, you're looking at maybe $7-10 in additional tax depending on your bracket. Since you can now e-file amended returns, I'd personally just take care of it and move on. The peace of mind is worth more than the small amount of money involved.

I just want to add my perspective as someone who works in tax preparation - you're absolutely right to be concerned about proper reporting, but this really is a very minor issue. The $35 interest income would result in maybe $7-12 in additional tax depending on your bracket. The IRS does have automated matching systems that compare your reported income to the forms they receive from banks and other institutions. However, they typically don't pursue discrepancies under a certain threshold because the cost of collection exceeds the revenue. That said, being proactive is always the safer approach. Since you can now e-file amended returns, my recommendation would be to go ahead and file the 1040-X. It takes about 15-20 minutes if you use the same tax software you used originally, and you'll have complete peace of mind. The alternative is potentially getting a notice in 1-2 years asking for the small amount plus minimal interest - not a disaster, but probably more stressful than just handling it now. Either way, this definitely won't affect your future filings or put you at risk for an audit. The IRS reserves audits for much more significant issues than $35 in unreported interest income.