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Is there a concept of de minimis for income received?

During a year I may open a half-dozen CD's with various banks. The interest I earn is usally less than $30. Do I have to meticulously track all this income and report it? I dont see why I need to bother myself with these trivial amounts so long as I am very careful about the big amounts. What's an auditor going to do, penailize me for $2 because I did not report $30?

I know "Average Joe" don't spend loads of time on such things so why should I? Am I just shooting myself in the foot for being Mr. Goodie two shoes?

Reply to
Homer Simpson
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For values of "meticulously track" similar to "open my mail in January and copy what the banks tell me", yes.

Set you up for backup withholding because you didn't report all your income, in the worst case.

Seth

Reply to
Seth

If the amount is under $10 you can probably get away with it because the IRS does not receive a copy of the 1099-INT (or has the rule changed). But being a good citizen, you should report everything.

On $30 the tax could be 33% or $30 or $10. It usually takes them one year to send a notice. So one year's interest (7%) and penalty (25%),

32% net, so about $14. If paying by mail (as opposed to EFTPS) add $0.45 for the stamp.
Reply to
removeps-groups

"Homer Simpson" wrote

$30 could swing it quite far considering the federal and state impact, and that if you "forgot" that simple to add income, what else did you "forget" that they should audit you for.

People might "forget" to report $5 of income and nothing happens, or, the whole house of cards comes down.

It's simple to report, so report it.

Reply to
paulthomascpa

"Is there a concept of de minimis for income received?"

Yes, $0.49 or less.

Reply to
Bill Brown

Because it will take you several hours to respond to each letter the IRS or State sends you in complaint, compared the 60 seconds to type this into tax software. Its not worth the time to have to answer the IRS.

Reply to
rick++

You could just agree to their observations and pay the penalty by EFTPS. It's no more than 10 minutes.

Reply to
removeps-groups

Actually, $0.99 or less. Truncation is permitted. - IRC 6102(a)(1).

Reply to
D. Stussy

You still might have to apologize and explain in order to avoid backup withholding, if you're unlucky.

Seth

Reply to
Seth

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