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Should I declare the interest income on my tax return?

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As others said, if the interest is paid under your mother's SSN, you shouldn't include the interest on your tax return. I assume that your mother is making less than the minimum amount for someone to have to file. I do wonder, though, if by not filing you might be missing out on property tax exemptions that are available to seniors. If your mother owns her own home, check into this. My mother doesn't have to pay any property taxes because her income is less than $12K and she is over 65. Disabled seniors also can qualify for special exemptions. To qualify in my area, I have to submit her 1040.

There is another consideration. States tend to be a little more money hungry than the feds. In Alabama, where we live, we have to pay taxes even on small amounts of money.

I'm sure you know the rules of your state, though, so probably don't need any advice from here. :-)
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My bank told me when there are two people on an account in a situation such as yours - one person is listed by social security number for tax purposes. You should be able to ask your bank if it is yours or your mothers. As Pamstegma stated the tax form sent by the bank listing the interest should be addressed to this same person. On a side note - intrest rates are so low on savings/checking accounts at banks unless you've got a ton of money or a really exceptional bank, intrest earned on these types of accounts seldom make any difference when it come to reporting them as income in regards to taxes.
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Whose name is on the 1099 form? That is who puts them on the tax return as income. As POA, it is your responsibility to see it gets done.
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Whose name is listed first? It's my understanding from conversations with our bank reps that the person listed first is the one responsible for inclusion of interest, depending on the amount, with federal taxes.

The first issue though is whether or not your mother has any tax liability. If she doesn't and doesn't need to file, the interest isn't an issue - based on my understanding.

Depending on the amount of the interest, it's a good idea to fill out a 1040 just to see where she stands in terms of liability. If the interest is sufficient and boosts her into the range of having tax liability, she will have to file.
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