Who pays taxes for the interest earned in a joint bank account?

Sharing a bank account with a partner or relative can make it easier to manage your money together. But it can also lead to a confusion during the tax season.

You must report and pay taxes on the interest you earn in a deposit account. How does this work when you co-opt for an account? Read further to discover.

Read more: The best tax software for 2025

Who pays taxes for the interest earned in a joint bank account?

The interest you earn in most standard bank accounts is taxable. This includes control and savings accounts, CDs, corporate bonds and deposited insurance dividends. When you gain interest in a joint bank account, all bank account owners have to pay taxes for their share.

“So if the joint account is owned by the four owners equally, each would pay taxes over 25% of the interest earned in the year,” said Logan Allec, CPA and Tax Company Choice Relief owner.

How to know how much interest you earned

Your bank or credit union must send you a 1099-inint form showing any interest that your account earned over $ 10. But you have to report any interest amount you earn in a deposit account, even if it is less than $ 10. You can check your account statements to see how much the account has earned during the tax year.

Not every account owner can take this form. The bank will generally send a 1099-go form to the primary account holder for the entire amount of interest gained during the year, Allec said.

If you are the main account holder and take this form, you are responsible for telling other account holders how much interest has gained the account during the year and which part of this interest should report.

To do this, you will complete a 1099-go form for each joint owner that details the interest acquired and responsibility for their percentage. You can find specific instructions on how to fill in a 1099-party on the IRS website. Once you have filled a 1099-party for each joint account holder, you will give this form the account holder so they can use it to submit their taxes.

The process is different if you are married and submit together. (More about that below.)

How to report the interest gained in a common account

Primary account holders should do more work when reporting interest in a joint bank account, but all joint owners follow a similar process.

“In their tax return, the primary account holder must report the total amount reported on the 1099-Iin form and then deduct the proportional shares of other interest owners as a” nominated distribution “,” Allec said. This shows that not all interest income from the common account belongs to you, so you will only pay taxes for your share.

All account holders must mark candidate distributions when they submit individual tax forms. If you make $ 1,500 or less interest income or dividend for 2025, you can enter your interest in your right line of your 1040 form. If you have earned more than $ 1,500, you will need to fill in program B and attach them to your 1040s. Here: as:

1. Write in the total interest gained in the account.
2. Write in the nominated distribution.
3. Deduct the taxable interest that does not belong to you.

This process will change if the owners of the joint accounts are also married spouses who submit jointly.

“If you own a joint bank account only with your spouse, and you and your spouse the file jointly, you should not worry about any of the candidate distribution issues as your income and your spouse are all combined in your joint tax return,” Allac said.

What is the level of taxes for the shared interest of bank account?

The amount of taxes you pay depends on your tax bracket.

“Interest in a taxable account in general is taxed as ordinary income, which means it is subject to the same tax rates you pay on your salaries,” Allac said.

Here is the level of taxes you can expect to pay in your Interest Interest for the 2024 tax year based on your income.

If you are a single filler or marriage separately:

• 0 – $ 11,600: 10%
• $ 11,601 – $ 47,150: 12%
• $ 47,151 – $ 100,525: 22%
• 100,526 dollars – 191,950 dollars: 24%
• 191,951 $ – 243,725 dollars: 32%
• 243,726 dollars – $ 609,350: 35%
• $ 609,351 and up: 37%

If you are married by submitting together:

• 0 – $ 23,200: 10%
• $ 23,201 – $ 94,300: 12%
• 94,301 $ – 201,050 dollars: 22%
• 201,051 dollars – $ 383,900: 24%
• 383,901 $ – $ 487,450: 32%
• $ 487,451 – $ 731,200: 35%
• 731,201 dollars and up: 37%