elliott.paule[at]gmail.com (boostm3) posted:

- quote -

"I imagine" and "I assume" are interesting concepts. Joint
accounts, when opened, are usually clearly defined by the
applicant and the bank: in most instances, the accounts are
for a husband and wife who intend to file taxes jointly, and
therefore only one of their SSNs is necessary for the 1099
to hit the target.

I cannot imagine a "joint account" which would be offered to
unrelated individuals, unless they had a "partnership"
agreement or some such justification -- which would clarify
the bank's reporting procedure.

I would therefore suggest that answer to your questions
about which party should handle the taxes due, can be
answered by simply informing the bank of the T-I-N (Taxpayer
Identification Number) that you wish to have attached to
that account. The 1099 will be rendered accordingly.

Bill

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boostm3 <elliott.pa...[at]gmail.com> wrote:

- quote -

Theoretically, each of you pays tax on your half of the
interest earned. As a practical matter, the bank is likely
to issue a 1099 to one of you for all the interest earned
and that is who the IRS will look to to pay the tax.

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boostm3 <elliott.pa...[at]gmail.com> wrote:

- quote -

Only one 1099 will be issued to the person whose SSN is on
the account. If that person wants to split the income with a
joint owner, s/he should issue a 1099-INT to the joint owner
for half the interest and file Form 1096 with the IRS. When
filing taxes, list all of the interest included in the
original 1099on schedule B and indicate that half of the
interest was nominee interest and subtract it out.

Dennis

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That pretty well sums it up... ie, if myself and another
person are joing checking acct holders, and lets say the
acct has a nightly sweep automatically of all balances over
$500 into a 5% money market acct. And lets say we keep a
balance of $50,000 in the checking acct since it earns a
nice rate of interest on unused balances.

At the end of the year, how are the taxes handled.. I would
assume that both owners, who I imagine have to each give
their SS numbers when opening the account jointly, receive a
1099 at year's end. But how are the taxes handled, ie, can
one pay the entire tax without the joint party being billed
also? How is it tracked and handled as to who pays the tax
on the interest earned on a joint acct like this. Same would
apply if it were any kind of joint account where interest or
dividends are earned.

Thanks much.

paul

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >