Joint savings account who claims interest earnings?

My brother and I have a joint savings account. We will be making about $4,000 by the end of this year in interest. I have just starting working this year and will probably bring in about $10,000. My brother does not not work and has no income besides the above mentioned savings account. We both live together in NYC. Neither of us are claimed as dependents.





Question: What is the best way to file taxes, and does my brother have to file at all?
Joint savings account who claims interest earnings?
The SSN that is listed first on the account is the number appearing on the 1099INT. The IRS will expect that person to claim the interest on Schedule B of Form 1040.





There are at least six different scenarios that apply to you, depending on your ages, student status, disability status, whether you pay the household bills.





The best possible situation would be if your brother is your qualifying child and his name appears first on the bank account. Then you would have only $10,000 in wages, and he would have $4,000 in interest income.





You would qualify for the Earned Income Credit by claiming your brother as your dependent. Your brother would have to file a return and may owe some tax, but not nearly so much that it wipes out your EIC.





If your brother is not your qualifying child, you don't get the EIC but you may be able to file with him as a dependent. In this case your taxes are under $300 even with interest income. If you can't claim your brother, you owe in the neighborhood of $500 in taxes in the worst case, filing single with no dependent.





Rather than go through all other possibilities, your brother is not required to file a tax return if his name appears second on the bank account. If his name appears first on the bank account and he is not a dependent, then he does not have to file a tax return. If he is first on the account and your dependent, he has to file a tax return.





You could split the interest using "nominee" interest but if that is the case, you should just split the accounts.
Reply:The short answer is that the person who's name and SS# appear on the account should report the interest. They will receive a 1099-INT in their name and that will be reported to the IRS. There are a number of ways to deal with this situation if the interest money really goes to both of you in some proportionate amount. You should really seek the advise of a tax professional as the possibilities and circumstances are too numerous to explain here.
Reply:If it is jointly shared then the interest should be split 50/50, unless you can prove a different ownership share (e.g., 60/40, 70/30, etc.) Does the 1099-INT that is received show both names and SSN's? If so, then what I described holds true. If it only displays one name, SSN, you should probably get a second account.
Reply:Wait till you get 1099-Int from your bank. It will have account holder's tax ID number (social security number) so you will know who has to add the interest income.


Normally, it is the person whose name appears first in the list of joint account holders.