Taxable Interest Income
Generally, any interest that you receive, or that is credited to your account and can be withdrawn, is considered income that is taxable. Examples of taxable interest are interest on bank accounts, money market accuracy certificates, and deposited insurance dividends. Interest on insurance dividends you leave on deposit with the Department of Veterans Affairs, however, is not taxable. Interest on Series EE and Series I U.S. Savings bonds generally does not have to be reported until you redeem or dispose of the bonds or until they mature. Interest from these bonds may be excluded from income if you pay qualified higher educational expenses during the year. Interest on municipal bonds are non-taxable. If your 1099-INT has the words “Income not reported to IRS” or “Details of 1099 tax exempt interest” then that interest is not taxable.