Q: I want to open a joint savings account with another person. How do we do this and what is the potential
issue with splitting the interest for income tax purposes?
A: Well, no problem opening the account. The issue is that the bank will want a W-9
which has one of your Social Security numbers. That
is the person that will get the 1099 showing the full amount of the
interest. If the income is material and
you want to split it on the two tax returns, we can do what is called a
"Nominee 1099." With this
whoever gets the original 1099 reports all the income and then we subtract half
of the income and include that half on the other persons return. The nominee 1099 is then filed with both
returns and with the IRS.
