Question

Taxes on bank account bonus if bonus is later taken back by the bank

Forum|Forum|6 years ago
February 23, 2020
1 reply
0 views

I received a $300 bank account bonus for opening a new account in October 2019. The account was then closed by the bank in January 2020, before the account had been open long enough to meet the terms of the bonus, and the bank said they're going to take back the $300 at some point. In the meantime, I received a 1099-INT for the $300, but what will happen for 2020 taxes once the $300 is taken back? Will I get a 1099-INT for -$300?

Not A Product Question

T

ThomasM125

You won't get another 1099 statement from the bank.

One option you have is to not report the $300 on your tax return, but you will probably get a notice from the IRS assessing you tax on the unreported income. If so, you can write them an explanation that you had to pay the money back and that will likely resolve the issue.

Another option would be to report the interest income on your tax return, then subtract it back off in the year you have to pay the money back as follows:

1. Go to the "Federal" section of TurboTax

2. Click on "Income and Expenses"

3. Find "Less Common Income" and choose the last entry "Miscellaneous Income"

4. On the next screen, "Miscellaneous Income" choose the last entry "Other Reportable Income"

5. Enter a description for your entry , and enter the taxable amount you want to exclude from income as a negative number

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"