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Does the IRS tax you on your checking account without interest?

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Answered 2008-12-05 02:52:11

No. If your checking account in non interest bearing, then the you will have no interest to report on your income tax return and therefore no tax to pay.

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No. You should only be taxed on income, not on your savings.

They use it to check your identity and to report any interest paid to the IRS.

The IRS does anything they feel like, as many times as they like. It was a major reason I moved to Canada.

Simple answer: yes, the IRS can levy anyone, anything, anywhere, anytime. Pay them what you owe, or they will take it... On another note, if you are referring to a matter of owing the IRS on a personal level, they may choose to simply levy any personal accounts you have instead of drawing from the corporate checking account.

I made arrangement to have $100.00 deducted each month for 2005 back taxes. IRS did not take a payment out of my checking account who do you contact about this

That usually means that an institution, possibly the IRS, has a lien or hold on your account. Go To: for help

Deposit it in your bank account, there will be no fee. If you don't have a bank account, you can open one with the IRS check!

Try to withdraw the funds. There should be a notice in the bank's system.

it is my understanding that the only people who can take money from your account without your permission are the IRS to pay back taxes. unless you sign somthing giving the bank permission to take money out of your checking account I don't think they can do it. make sure you read the fine print of any loan document so you know that you are not giving them the right to take money out of your checking account.

The IRS is not legally linked with the banking industry. The IRS uses banking information that is given them when you have interest earned on a bank account. The banks report the interest via a 1099 INT. The only time the IRS will use that information is when you have been negligent in paying your taxes. Part of the due collection process of the IRS is to issue bank levies against your account and collect all the money in your account for that one instant in time when the levy is issued. To avoid a bank levy when you owe back taxes you must be in a resolution with the IRS for the taxes you owe.

See link below. You've only got 21 days before the bank forwards the money to the IRS so you need to move fast.

Yes. A credit union has savings and checking options and either one or both can be seized to repay a delinquint IRS debts for back taxes

Generally speaking, the IRS does not care where the money comes from. However there are several issues with doing this. The abililty to prove what it was for is one. The process to straighten it out if there is a mistake is another.

In the US an interest free loan can be considered income of the value of the interest, whether charged or not, depending upon who is making the loan. Check with an accountant to insure that it is okay otherwise you can have the IRS checking your tax returns.

The IRS can take a dollar if they feel like it if you have unpaid taxes...and they can do it without notice. Well, they do have to give you notice. The IRS is required to send Letter 1058 to you, which will be titled "Final Notice of Intent to Levy and Notice of Your Right to a Hearing" before they can levy a bank account. You have 30 days from the date of this letter to make arrangments with the IRS. If after 30 days you have not made arrangments, and did not file for an Appeal Hearing (there will be instructions on Form 1058 on how to file the Appeal) the IRS can levy your bank account. Even if it only has $1.00 in it. The IRS has no way of knowing how much money you have in the bank. What they are going to do is look at what has been reported to them in the past to determine where you have open bank accounts. If you had interest reported to you from a bank last year, that tells them that you probably have a savings account there. That's where they will send a levy. If you have not had any interest reported to you from the bank that you currently have an account at, it is likely that the IRS has no idea where you are banking. They do not issue levies randomly to banks. If they cannot find a bank account, they will move on to your most recent W-2's to determine where you are working now and will likely proceed with a garnishment instead.

You will if you get whats called a deposit audit from the IRS. I have had this problem in my past. Document where from and who to.

A lot of payday advance companies or check cashing companies advertise that they cash IRS checks.

I had 2 account with me one checking and 1 saving later on i closed my checking account and retained saving. when i filled the IT return by mistake my checking acount number was used there which i want to correct now. I presume you are talking about the account number for direct deposit of your refund? That's a tough problem. Usually, there is little you can do except hope that you didn't accidentally put a real account number belonging to someone else on the form. If you put a non-existent account number down on the form, the payment will be returned to the IRS and the IRS will mail you a check in a few weeks. If you accidentally put a real account number down, you will be in for months of bureaucratic nightmares. But call the IRS at 1-800-829-1040 and tell them what you did. See if they can help.

The IRS can garnish up to 15% of your Social Security check unless you work out an alternate repayment plan or are categorized as "uncollectible" due to income and expenses. If your Social Security benefits are in a bank account that has funds from other sources, the IRS may levy the account and take a larger amount. It would be in your best interest to contact the IRS to discuss your options.

They can send a tax levy to financial intuition. Any money you have in the account will be sent to the IRS

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