The Impact of High-Yield Savings Account on Your 2023 Tax Bill: What You Need to Know
Thursday, 14 March 2024, 16:30
Tax Season Impacts: Understanding the Role of Interest Earnings
If you earned interest on a savings account, CD, or money market account last year, you likely have a 1099-INT form waiting for you in your bank account's web portal. You'll need to refer to this form when filing your return using tax software. It's a good idea to look up your federal tax bracket to see what percentage you can expect to owe of the interest or bonus you received. You can set this amount aside in preparation to pay Uncle Sam.
Planning for a Higher Tax Bill
- Check for a 1099-INT form in your bank's web portal
- Refer to the form when filing your return
- Understand your federal tax bracket to determine owed percentage
Coping Strategies
- Set aside a percentage of earnings in a dedicated tax payments sub-account
- Prepare for any extra taxes you might owe due to interest income
- Consider offsetting taxes with credits and deductions
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.