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> There is no "legal paperwork" for accounts. ...so I can just throw away all the tax documentation for my mid/high tier interest bearing checking and savings
by gravitas 6y ago
> There is no "legal paperwork" for accounts.
...so I can just throw away all the tax documentation for my mid/high tier interest bearing checking and savings accounts at both my credit union and bank? that share certificate I have at my credit union generating dividends? "Legal" to me means "things I have to do or the police come find me." Your interpretation might be different, but my accounts have legal paperwork.
- justinclift 6y agoIs that "legal paperwork" something which you (the end user) has to do, and not something that the credit union/bank does?
- gravitas 6y agoBoth. Financial institutions (broadening this to cover brokerages as well) produce federally required documentation (it may be digital in 2020, automated) for tax purposes; the most common in my travels is a 1099-DIV (dividend payments) but there are many kinds for all sorts of financial things a bank could/can handle related to investment income. Both parties submit paperwork to the IRS - the institution tracks the assets they're holding/managing and reports it to the IRS on their side; they issue you appropriate documents and you do your taxes and report it using whatever appropriate form. The paperwork is of course dependent on the situation, for the average checking/savings accounts I will guess it's the 1099-DIV as most common - simple interest payments.
- gravitas 6y agoI got that slightly wrong, it's 1099-INT for interest in income on checking/savings, 1099-DIV is for dividends only.
- clintonb 6y agoGood point. 1099s must be submitted to the IRS; however, that is done electronically. The cost, shared by all accounts, is negligible.