Sara's employer withheld taxes from her paycheck throughout the year. At the end of the year she received a W-2 and also received a 1099-INT from her financial institution. When Sara filed her taxes she did not include information from her 1099-INT because she increased her withholdings on her W-4 form during the year. Evaluate Sara's thinking.

Question

anonymous · Answer

Sara was right to have not included information from her 1099-INT since she paid more taxes by increasing her withholdings.
Sara was wrong to have not included information from her 1099-INT since taxable interest should be reported to the government.
Sara was wrong to have not included information from her 1099-INT since increasing her withholdings reduces her tax liability.
Sara was right to have not included information from her 1099-INT since an individual is not required to report taxable interest.