Hi All, I'm totally new to taxes. I'm looking to get a Certificate of Deposit so I get good interest rates after a year. So the interest get taxed. My question is how, I mean the step by step.

If I opened the CD today with 1 year maturity, here are my questions please.

1. When do I pay the interest tax? In filing season or when it matures Oct 2019?
2. How do I pay the tax? I mean like the exact steps.

Thanks in advance!

Hi All, I'm totally new to taxes. I'm looking to get a Certificate of Deposit so I get good interest rates after a year. So the interest get taxed============= Yes you do if it is taxable interest. All of the interest that is received is reported on your 1040 tax form.

If I opened the CD today with 1 year maturity, here are my questions please.

1. When do I pay the interest tax? In filing season or when it matures Oct 2019? ========== Interest income becomes taxable when it's actually paid to you in 2019, assuming you use the cash method of accounting, which the vast majority of taxpayers do
2. How do I pay the tax? I mean like the exact steps. ======= Interest income is reported by the bank or other financial institution on Form 1099-INT, a copy of which is then sent to you and to the IRS. You'll receive a 1099-INT from each institution that paid you $10 or more in interest during the year. Check Box 1 of any 1099-INT forms you receive. Taxable interest is reported there; You'll report interest income in the following places.Taxable interest goes on Line 8a of Form 1040

Thank you Wnhough.

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