Interest is income, so your W-2 won’t be enough to account for that. You’ll also need to go to any banks, taxable brokerage accounts, etc, because that money will impact your taxable income. Still not a ton of work, but it’s still more than just W-2 + standard deduction.
Most people aren’t going to have anywhere near enough taxable investment income for that to matter.
I think I got about $.87 in interest payments from bank accounts in the past year. I don’t think that’s going to make a huge difference in taxable income.
Let’s say you have $10k in cash (typical emergency fund) and get 4% on it (relatively competitiv; e.g. Ally gives 4.25%), that’s $400 in interest (not including compounding), which is a reportable amount of income. If you’re doing something clever or have a bit more cash for some reason (e.g. saving for a house), you could easily get into more interesting amounts of money.
Yea I appreciate the dude trying to make sure people don’t forget stuff and get fucked by the irs but he’s a bit privileged thinking we’re all as well off as he is.
I’m not suggesting that at all, I’m merely suggesting that you review your interest in your bank account since it could be a number the IRS could be interested in. It all depends on how much savings you have, what interest rate you get, etc, but even some checking accounts can have enough interest to be interesting.
I enter in my w4 and take the standard deduction. Takes me 5 minutes.
Haven’t owed since I had a retail job that reset my withholding when I got promoted to make it look like I got a bigger raise.
Do you not earn interest on any accounts? No loans on which you pay interest? Are you a student?
Like I said: standard deduction. Those numbers never come close to make itemized deductions worth the time and effort.
Interest is income, so your W-2 won’t be enough to account for that. You’ll also need to go to any banks, taxable brokerage accounts, etc, because that money will impact your taxable income. Still not a ton of work, but it’s still more than just W-2 + standard deduction.
Most people aren’t going to have anywhere near enough taxable investment income for that to matter.
I think I got about $.87 in interest payments from bank accounts in the past year. I don’t think that’s going to make a huge difference in taxable income.
You need a better bank account then.
Let’s say you have $10k in cash (typical emergency fund) and get 4% on it (relatively competitiv; e.g. Ally gives 4.25%), that’s $400 in interest (not including compounding), which is a reportable amount of income. If you’re doing something clever or have a bit more cash for some reason (e.g. saving for a house), you could easily get into more interesting amounts of money.
There’s your mistake right there, thinking people have even $10k to serve as a spare emergency fund.
I don’t even have a thousand spare right now for an emergency.
Yea I appreciate the dude trying to make sure people don’t forget stuff and get fucked by the irs but he’s a bit privileged thinking we’re all as well off as he is.
I’m not suggesting that at all, I’m merely suggesting that you review your interest in your bank account since it could be a number the IRS could be interested in. It all depends on how much savings you have, what interest rate you get, etc, but even some checking accounts can have enough interest to be interesting.
With the higher funding for the IRS, we’re seeing more audits, and poorer people will likely get audited more. So I’m just trying to protect people from getting audited.