How do taxpayers report interest income from savings accounts?

Taxpayers report interest income from savings accounts on Schedule B of Form 1040. This form is specifically designed to report interest and ordinary dividends received during the tax year. Schedule B allows taxpayers to provide details regarding the sources of their interest income, especially if the total interest received is more than a certain threshold, or if they have received interest from foreign accounts.

In contrast, Form W-2 is used for reporting wages and salaries earned by employees, making it unrelated to interest income. Schedule D deals primarily with capital gains and losses from the sale of investments and is also not applicable to the reporting of interest income. Form 1099 can be used to report various types of income, including interest income, but it serves as an information return sent to the taxpayer and the IRS rather than a form used directly by the taxpayer to report their income on their tax return. Therefore, utilizing Schedule B is the correct approach for reporting interest income from savings accounts on the taxpayer's return.