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What Do I Do With These 1099-INT & 1099-DIV Forms?

March 22, 2016

Many taxpayers do not receive income solely from wages; income may also come from investments and interest. If taxpayers receive income from interest, dividends or capital gain distributions, they should remember to consult any form 1099-INT and form 1099-DIV they received when preparing their tax return.

What is Form 1099-INT?

Usually interest is taxable income and must always be reported to the IRS. Form 1099-INT, Interest Income, is used to report interest received from banks, brokerages and other financial institutions. These institutions are not required to file Form 1099-INT for interest of less than $10, but taxpayers still need to report it on their tax return.

What Form 1099-INT Includes

  • Box 1 – total taxable interest paid
  • Box 2 – the amount of early withdrawal penalty (if any)
  • Box 3 – the amount of U.S. Treasury security interest paid
  • Box 4 – the amount of tax withheld
  • Box 5 – investment expenses
  • Box 6 – foreign tax paid
  • Box 7 – the foreign payor
  • Box 8 – tax-exempt interest
  • Box 9 – interest from special private activity bonds
  • Box 10 – the CUSIP number for tax-free bond interest
  • Boxes 11-13 – state ID information and withholding

Exemption

Certain entities are not required to file Form 1099-INT. These include:

  • A corporation
  • A tax-exempt organization
  • Any individual retirement arrangement (IRA)
  • Archer medical savings account (MSA)
  • Medicare Advantage MSA
  • Health savings account (HSA)
  • A U.S. agency
  • A state
  • The District of Columbia
  • A U.S. possession
  • Registered securities or commodities dealer
  • Nominees or custodians
  • Brokers
  • Notional principal contract (swap) dealers

What is Form 1099-DIV?

Taxpayers receive Form 1099-DIV, Dividends and Distributions, when their stocks pay dividends or a mutual fund earns them capital gains. Taxpayers must include the income reported on 1099-DIV on their tax return and pay the requisite taxes.

What Form 1099-DIV Includes

  • Box 1a – total ordinary dividends
  • Box 1b – total qualified dividends
  • Boxes 2a-d – break down of capital gains from mutual funds, REITs and collectibles
  • Box 3 – nondividend distributions
  • Box 4 – federal tax withheld
  • Box 5 – investment expenses
  • Boxes 6 and 7 – foreign tax paid and the foreign payor
  • Boxes 8 and 9 – cash and noncash liquidation distributions
  • Box 10 – private interest dividends
  • Box 11 – specified private activity bond interest dividends
  • Boxes 12-14 – state ID information and withholding

If the total amount reported in box 1a of Form 1099-DIV exceeds $1,500, taxpayers may be required to prepare Schedule B, which reports information about each 1099-DIV.

If you have received any forms 1099-INT or 1099-DIV and are uncertain about how to file your taxes, be sure to check with a licensed tax professional. Preventing expensive tax mistakes before they happen will save both time and money.

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