Posted by William Charles on April 8, 2017
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Published on April 8th, 2017 | by William Charles

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HSBC Finally Sends Out 1099-INT For $350 Bonus – Offers To Pay Costs For Refiling

Last year HSBC offered a popular $350 checking bonus, yesterday a lot of readers reported receiving a 1099-INT form for this bonus. You can view the full letter below:

hsbc bonus

1099-INT forms are supposed to be sent and post marked by January 31st, 2017 for amounts over $10 ($600 requirement is for 1099-MISC). Regardless of whether you receive any 1099 form, I always recommend treating bank account bonuses as interest and paying taxes on them. What’s interesting is that some readers are receiving this 1099-INT for 2016 even though they received the bonus in 2017.

HSBC are offering to reimburse reasonable costs related to this error. I’m not an accountant or lawyer, so please don’t ask me what reasonable costs are. You can read Chuck’s thoughts on paying taxes for bank account bonuses, credit card rewards here. Please make sure to seek advice from a licensed professional.

Hat tip to /r/churning & reader Phil



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Credit
Credit

I had told you, this was a shitty bank. Like most things in life people will learn that fire is hot only by getting their own hands burned, not by watching others burn theirs.

Drnefario
Drnefario

I agree with you. It took me 3 months to open my bank account with them. They asked me more questions than I faced in my PhD dissertation. Logging into their website and iphone app is an all together different hassle. Finally they opened it but forgot to send my debit card. I decided that was it.. Without even using my account I closed it. Will never open another HSBC account again.

Frank
Frank

I sent in all of my application info, called three times and still never received a new account for the $350 bonus. Should I file Consumer Financial Protection Bureau compliant?

Jeff H
Jeff H

Interesting since I have yet to be paid. On line customer service chat said expect to be paid this month which would be as promised due to November / December application and account start dates. Maybe, I will send IRS filing extention since all estimated tax payments exceeded my taxes for 2016.

Credit
Credit

If you get paid this year, they don’t go on last year’s taxes.

sirtheta

HSBC is the worst.

LC
LC

Somehow they are the 5th largest holding on the European stock market index fund. This is baffling to me!

Radster
Radster

Agree. I’m still battling to get my bonus. I had closed a previous account in a time-frame which qualified me for this bonus, however, HSBC had left ‘open’ the associated debit card for another 6 months! It’s been under review for 5 weeks now despite my weekly requests for an update.

Jeff H
Jeff H

Further reading indicates some DECEMBER 2016 bonus payments credit in DECEMBER 2016 were on January 2017 monthly statements. That is what is causing the date issue since some customers reportedly were told 1099 INT would not be issued for 2016. Bank gave incorrect information since tax was payable for date bonus was paid-credited to account. January 2017 statement was not a correct factor in the IRS eyes.

Wyle
Wyle

My bonus posted on 12/22 AND was included in my statement ending 12/22/16. I called them March 28th, just 3 days before the dated letter, and was told no 1099 for 2016, but it would be reported for 2017. I told them the IRS wouldn’t agree with doing it that way. My bad.
I closed my account yesterday.

Adam D
Adam D

Well, if the 1-2month long wait to fully open accounts wasnt enough for anyone to close after 180days then this is surely the incompetence that broke the camel’s back…hope their bpo call center in manila isnt too swamped nowadays only have a few days left. Still worth the $350.

Dan
Dan

Honestly, who cares. You should have remembered you got the 350. Even if you don’t remember, no big deal.

Wyle
Wyle

No big deal if you include it in your taxes for 2016 as long as they DON’T issue a 1099 for 2017. If they did that, next year you’d have to argue with the IRS that you already paid tax on it. Good luck with that. You *might* convince them after great effort. I’m sure HSBC would jump right in to clarify it.

Jane
Jane

Seriously. You report interest (especially the obvious $350 one) regardless of receiving 1099-int or not. I know some people were happy Santander etc didn’t send out their forms (or got lost in the mail, who knows)– but that’s tax evasion.

Bob
Bob

Let me guess, you paid taxes on all of your Amazon purchases before they started collecting taxes years ago, right?

You also pay taxes on all online purchases that don’t charge tax at checkout.

Jane
Jane

Wow that was unnecessarily snarky, Bob. I wonder why you felt the need for that.

I’m not talking about anyone’s moral obligation (although I highly value that as well). I’m talking about this silly gamble you’re taking by not reporting what is most likely reported to the IRS by banks themselves. The computer runs and finds mismatching information, and unreported 1099-int is just too easy to find.

But since you were curious about my shopping habits, yes, I actually have reported few businesses to my state divison of taxation for violating sales tax laws.

Ian
Ian

No state sales tax IF you’re a resident of Alaska, Delaware, Montana, New Hampshire and Oregon!!

Curtis
Curtis

Agree – if you receive a bank bonus, you WILL get 1099’ed for it (eventually, as this HSBC issue proves!). Record all your bank bonuses in a spreadsheet and list them in your tax filing for the year received. Period. If the bank screws up and doesn’t send the 1099 on time, it won’t be your problem, just as this delayed 1099 is not a problem for me.

stacker
stacker

It took them 3 months to contact me after I applied so I told them where they could shove it.

Steve
Steve

Truly one of the most inept banks I’ve ever had the mispleasure of doing business with.

mangoceviche
mangoceviche

i received 1099-INT yesterday. I filed
my taxes in Feb and reported the $350 as 1099-misc income. now i am debating whether to amend my return or wait for potential notice and then explain. ughhh

TJ
TJ

Why would you report as 1099-MISC when bank bonuses are always 1099-INT? Since you self reported without the 1099, why didn’t you just mark it as 1099-INT? Just curious.

mangoceviche
mangoceviche

bank bonuses aren’t always reported on 1099-INT. i forget which bank but the terms of that bank’s promotion said bonus is 1099-MISC reportable. Since 1099-INT is required on interest of $10+ , I figured I didnt get a 1099-INT from HSBC because they report their bonus as 1099-MISC which is only required if $600+

John
John

I though I received my bonus in January but I received it on 12/22. Filed taxes last week (probably the earliest I ever have).

Oh well. Not the end of the world but certainly an inconvenience. Hopefully they will be able to mail me a check for reimbursement as I plan to close the account next month.

Eduardo Baez
Eduardo Baez

My HSBC $350 Bonus posted on 12/22/2016 and was included in my statement ending on 01/13/2017. Since interest must be reported in the year you earn it, I reported HSBC $350 Bonus in my 2016 taxes regardless HSBC has not issued a 1099-INT so far. I had the same issue with other 2016 bonuses such as TD Bank $300 Bonus and CitiBank $500 Bonus. Anyway, as a rule of thumb, I always keep a copy of the statement showing the date in which bonus was paid and report it in my taxes. So, for any bank bonus, 1099-INT forms and/or statements are my taxes supporting documentation.

Bob
Bob

CPA here. Even if you did not include the interest on your return and the IRS finds out, they’ll let you know and you just have to pay the tax plus interests. Honestly, since the tax is not much, the interests are just some pocket money. So whether you amend the return or wait for IRS to give you the notice (sometimes they won’t even audit), you will be fine.

Dougie
Dougie

Thanks for the thoughtful and informed response Bob, appreciate it.

Eduardo Baez
Eduardo Baez

In my humble opinion, I will never take the risk of being flagged by the IRS. For substantial errors, the IRS can go back six years. Since many bank bonus chasers use to report only 1099-INT received forms, they are at risk of paying taxes plus interests due to missed 1099-INT forms for the previous six years. I don’t know if not reporting 1099-INT consistently is a substantial error for the IRS. I will never play that game.

mangoceviche
mangoceviche

No comment on reporting or not reporting interest without 1099-INT, but regarding substantial understatement, it’s 10% of your tax or $5000, whichever is greater.

Tory
Tory

This is why I think not reporting bonuses for which I don’t get a 1099 is worth the gamble. The interest they charge for underpayment is reasonable; something like 4%.

Julia
Julia

That was very useful, Bob. Thank you!

Joshua H.
Joshua H.

Just an warning here, there is still no 1099-INT available in your online banking. And, do NOT call their customer service line. It’s just waste of time. Their customer service line reps can not even speak understandable English for anything out of their standard scripting template.

DH7
DH7

Can anyone explain how to pay for bank bonuses without the 1099-int (whether lost or didn’t show up). I have a bunch I’d like to cover in Turbo Tax but I don’t have the banks’s Tax IDs…
Any advice?

Eduardo Baez
Eduardo Baez

I used to prepare my taxes for free with TaxAct but it requires the Federal Identification Number also known as Employer Identification Number (EIN) for any 1099-INT issuer. Since three banks did not send me a 1099-INT form ($1,150 total interest), I tried the new Credit Karma Tax free software but it also requires the payer’s EIN. I was able to report all interest using the free online version of Turbo Tax. Turbo Tax does not require the payer’s EIN just the payer name and the interest paid.

Ann
Ann

I use H&R Block desktop software, and had the option to enter bank interest without 1099/EIN info, which I’ve needed to do a couple times. All programs should have a way to do that buried somewhere, because banks won’t generate a 1099 for less than $10 of interest in a year, but you’re still supposed to report it.

Eduardo Baez
Eduardo Baez

Please find below HSBC info from my 2016 1099-INT form.

HSBC Bank USA, N.A.
2929 Walden Avenue
Depew, New York 14043

Telephone 1-800-975-HSBC
Federal ID No. 20-1177241

momosan
momosan

In Turbo Tax you don’t need the federal id number. In the “Interest” section of income, where it asks you to enter 1099-INTs, pretend you got one from this bank, enter all the info. They’ll ask if the 1099-INT provided the bank’s id number, and you just click no and keep going.

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