What amount of interest income does Denise report on their tax return?

The amount of interest income reported on a tax return needs to reflect the total interest earned during the tax year. In this scenario, Denise's reported interest income of $10,250 may suggest that this figure includes the total interest from various sources, like savings accounts, bonds, or other interest-bearing instruments. This amount could include not just simple interest but could also account for any accrued interest that might have been added to Denise's accounts before preparing the tax return.

Assessing why this specific amount is essential, it reflects how interest income contributes to an individual’s overall taxable income, which can affect their tax bracket and the amount of tax owed. Accurate reporting of interest income is crucial because underreporting can lead to penalties or interest from the IRS, while overreporting could result in overpayment of taxes.

The other amounts do not capture the full total of interest earned during the year, indicating either incomplete reporting or miscalculation in the reporting of the actual interest accrued or earned.