IRS Form 1099 is formulated by Internal Revenue Service to file and ready information return to state different types of income including salaries, tips and wages. Examples of which are 1099 INT (interest), 1099 DIV (dividends), 1099 B (sales proceeds) and 1099 MISC (miscellaneous). Form 1099-DIV is record of ordinary and qualified dividends, total capital gains, income tax withheld, non-taxable distribution and all taxable capital dividends and gains being paid to the investor. The form is used by investors to report received income from their investments every year.
Steps on how to Fill Out IRS Form 1099-DIV:
- Get a copy of the IRS Form 1099-DIV. You can get the form through the internet at irs.gov or by calling (800) TAX-FORM (829-3676). Look for the website of IRS to order a valid copy of the form. There is a sample form located in their website but this is not valid as an alternative to original ones. The IRS will provide legal copies of the forms.
- Write your ID number as a Federal Tax Payer and the Receivers ID number. The numbers are commonly an EIN (Employer ID Number) or Social Security number. Enter it in the box. Beneath the boxes, write the receiver’s full name, complete address and zip code. If the recipient has another tax id number, check the box.
- Select the “Corrected” or Void” box located at the upper corner of the form. Write your full name (payer), complete address, telephone number and zip code in the box. This part states that you as a payer paid all the distribution and dividend income.
- State your total taxable dividends. Write the paid short term dividends each year on Box 1a of the form. If there is a part where the dividend is open to 5% to 15 % gain tax, enter it on Box 1b. Present long term capital gain from REIT (real estate investment trust) or regulated investment company and write it on Box 2a. The unreceptive gain from real property amount is stated on Box2b. On Box 2c is the part of 2a which is a Section 1202 gain. On Box 2d, is the 28% gain from the rate of exchange of taxes.
- Present the non-taxable dividend distribution. It is the tax return of the receiver which is located on Box 3. State any back up income tax returns of the payer on Box 4. Writing the 28% of the distribution income or dividend is a must if the receiver doesn’t give you a Tax ID number. Box 5 presents part of the receiver’s expenses on the company.
- Enter foreign tax that you pay. It is on Box 6. On the Boxes 7, 8 and 9. Foreign entity and non cash and cash distributions are stated respectively.
- Transmit your IRS form 1099-DIV on time. Also send a duplicate of the form the receiver and check if he receives it. Visit the IRS website to know the instructions on how to skip filling deadline because changes may occur.