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    crazee85's Avatar
    crazee85 Posts: 82, Reputation: 1
    Junior Member
    		  
    #1

    Aug 6, 2011, 08:55 AM
    Joint Savings Account - Taxes
    Hi,

    I wanted to open a joint savings account with my fiancé... I was wondering who would be responsible for the taxes on the interest income... Is it the first person listed on the savings account?? Or is it divided based on who contributed how much??

    Thanks!!
    ma0641's Avatar
    ma0641 Posts: 15,675, Reputation: 1012
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    #2

    Aug 6, 2011, 09:30 AM
    You will have to supply a TIN or an SSN to open the account. That's who will be sent the 1099INT. Of course, today, interest on a savings account is about .1% so you may find the interest negligible
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #3

    Aug 6, 2011, 09:39 AM
    Interest is taxed to the person whose SSN is listed FIRST.
    crazee85's Avatar
    crazee85 Posts: 82, Reputation: 1
    Junior Member
    		  
    #4

    Aug 6, 2011, 01:16 PM

    Thanks a lot for clarifying this for me...

    @ma0641: actually online savings accounts like discover and sallie mae give around 1.10%... I know it is still not too high... but still better than almost nothing..!
    crazee85's Avatar
    crazee85 Posts: 82, Reputation: 1
    Junior Member
    		  
    #5

    Aug 6, 2011, 01:18 PM

    Just one more thing to clarify... if my fiance's SSN is listed first in the joint savings account, then the money I put in it won't be considered as gift for tax purposes right?? I guess it should not because it is my joint account as well... but just wanted to clarify... thanks!!
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #6

    Aug 6, 2011, 03:10 PM
    No, because you still have possession of the funds.

    Even if possession was transferred, gift taxes do not kick in until the gift totals EXCEED $13,000 for the calendar year.
    ma0641's Avatar
    ma0641 Posts: 15,675, Reputation: 1012
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    #7

    Aug 7, 2011, 12:47 PM
    Yes,online savings do, I was thinking bricks and mortar. I use Vanguard prime money market.
    IntlTax's Avatar
    IntlTax Posts: 831, Reputation: 23
    Tax Expert
    		  
    #8

    Aug 9, 2011, 10:10 AM
    While the Form 1099 may report the interest as taxable to the individual listed first on a joint account, this is not how the income is taxed. Instead, the income is taxed to the person who has the right to the income under local law, usually based on the amounts of funds contributed by the owners.

    See http://www.irs.gov/pub/irs-pdf/p17.pdf page 55, under the title "Joint Accounts."
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