WSJ Article On Banks Reporting Taxes On Bonuses

In addition to Citibank issuing 1099s for the frequent-flier miles bonuses, HSBC and Citizens Bank surprised some of its customers with 1099s on gifts. This Wall Street Journal article looks into this issue of taxes on bank bonuses. It included a few interesting details on what the IRS requires:

The cutoff for banks to notify the IRS is $20 for accounts with balances in excess of $5,000 and $10 for accounts with balances of less than $5,000. Gifts that fall below those thresholds are supposed to be self reported by the recipients. If the gift exceeds $600, it is classified as miscellaneous income—as opposed to interest income—and requires a different tax form.